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).

Finance lease featured image

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

Disadvantages

What are the disadvantages of a finance lease

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.

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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.

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