Finance Leasing is a common finance method used by
Australian companies irrespective of size. With ongoing investment
by industry in technologies that have obsolescence factors, Finance
Lease is more popular for plant and equipment that has a higher
retained value at the end of the lease term. Under a Finance Lease
residual values are set in accordance with the depreciated value
at the end of the lease term. Terms are available up to 7 and
Asset Purchase (CHP)
Also known as CHP, this method is used by companies that prefer
to amortise the principal debt over the selected term. Financing
under CHP can also be structured with balloon payments if required.
Conventional terms are up to 5 years.
Term Rental Finance
A large number of companies, including public
sector authorities use Term Rental Finance where technology
is advanced and ownership is unnecessary. This product allows
amortisation of the borrowing, is flexible for upgrading and adding
services, and the facility rentals are fully expensed. Obsolescence
factors dictate the use of Term Rental as the customer moves to
the latest available business technologies. Terms are available
to 5 years, and up to 10 years for Public Companies.
Operating Lease (Off Balance
For leases that qualify as operating leases under AAS17, the
borrowings or future rentals are not included on the balance sheet
as a liability, and the leased equipment is not listed as an asset.
This can increase a company's borrowing capacity and improve key
Tri-Partite Term Finance Software
This is a specialised product that facilitates software funding
where acknowledgement of the software integration is made by the
customer, financier and software licensor.