Business finance
Finance lease
In a finance lease or car lease, the lender purchases an asset, such as a car, and allows you to use the asset against a monthly payment (and possibly a deposit).
Loan size
$10K To $2M
loan term
1 to 5 years
Interest rate
5% to 10%
Approval speed
Medium/Fast
finance lease
Key features of a finance lease
You are often given the option to purchase the asset at the end of the lease term but you are under no obligation to do so. Signing a finance lease gives you the benefit of use of the asset, equipment or car for low monthly payments and no initial payment.
You can choose the term of your lease, choose whether or not to purchase the asset at the end of the lease and you have no responsibility for disposing of the asset once the lease term is over should you choose to return it.
Compare a finance lease
Advantages and disadvantages
Advantages
What are the advantages of a finance lease
- No capital outlay
- Option to purchase at end of term
- No commitment post lease term
Disadvantages
What are the disadvantages of a finance lease
- No ownership
- Possible deposit required
Common uses & good to know
Everything else about a finance lease
Common uses
Businesses often use finance leases to finance the use of a car or vehicle for commercial use.
Finance leases are a good option if you are unsure about your company’s future needs or outlook.
The GST paid on rental and other charges may be eligible for tax credits.
Good to know
You do not own the asset and will need to either purchase it, replace it with a new lease or purchase another asset at the end of the lease term.
Non-payment of the monthly finance fee will result in the owner seizing it which may be very disruptive to your business.
The lessee will retain the right to claim the depreciation of the asset but you as the hirer can claim the entire lease payment as an expense for tax purposes.
Alternative Commercial Lending options
Other Business Finance Products
Secured Business Loan
A secured business loan is a loan made by a bank or finance company where the lender requires the borrower to pledge assets as collateral against the loan.
Business line of credit
A business line of credit is a very flexible form of lending where you have cash available to draw down on as and when you need it.
Trade finance
Trade finance is any form of finance that is issued to support international trade, including letters of credit, debtor finance, & export credit.
Using Debtor Finance to Manage Business Cash Flows
Any business owner knows the importance of managing cash flows to ensure that liquidity remains strong and that the business has the ability to take advantage of sudden growth opportunities or big contracts Late payments impact businesses severely as cash that could otherwise be reinvested in growing stock marketing or
Finance lease FAQ
Frequently asked questions
Most businesses will qualify for a finance lease as long as you can show that your business’ cash flows will allow you to pay the finance fee.
As the piece of equipment will act as collateral, a finance lease is a good option for companies with a weaker credit rating.
