Hire Purchase Australia
Fixed payments. Guaranteed ownership. Simple and predictable.
Hire purchase is a straightforward business finance structure. Make fixed payments over an agreed term and take full ownership when the final payment is made. Flash Funding compares 40+ lenders to find your best hire purchase rate.
Start with the best matching product path, then continue via the secure customer portal.
What Is Hire Purchase?
Hire purchase (also known as commercial hire purchase or CHP) is a business finance arrangement where you "hire" an asset while making regular payments, and the ownership transfers to you when the final payment is made. During the hire period, you have full use of the asset for business purposes.
Hire purchase has been a staple of Australian commercial finance for decades. Its simplicity and predictability make it popular with businesses that want guaranteed ownership without the complexity of other finance structures.
The key feature of hire purchase is certainty. You know exactly what you will pay each month, exactly when the asset will be yours, and exactly what the total cost will be. There are no surprises, no residual value decisions, and no end-of-term complications.
How Hire Purchase Works in Practice
When you enter a hire purchase agreement, the finance company purchases the asset and "hires" it to you. You make regular (usually monthly) payments over an agreed term — typically 2 to 7 years. When the final payment is made, ownership transfers to your business.
During the hire period, you are responsible for maintaining and insuring the asset, and you can use it freely for your business operations. The asset is recorded on your balance sheet, and you can claim depreciation deductions.
Hire purchase agreements can include a balloon or residual payment at the end of the term. This reduces your monthly payments but means a lump sum is due at the end. Alternatively, you can structure the hire purchase with no balloon, meaning the asset is fully paid off through regular instalments.
Tax Treatment of Hire Purchase
Under a hire purchase, the interest component of your payments is tax deductible, and you can claim depreciation on the asset. However, unlike a chattel mortgage, GST-registered businesses typically cannot claim the full GST upfront — the GST is paid progressively with each instalment.
The depreciation deductions can be significant, especially for assets that qualify for accelerated depreciation or instant asset write-off provisions (when available). Your accountant can advise on the optimal depreciation method for your specific assets.
For businesses considering hire purchase versus chattel mortgage, the main difference is the GST treatment. If upfront GST recovery is important to your cashflow, a chattel mortgage may be preferable. Otherwise, hire purchase offers similar benefits with a simpler, more traditional structure.
How It Works
Select Your Asset
Choose the equipment, vehicle, or machinery you want for your business.
Get Matched
Flash Funding compares hire purchase rates from 40+ lenders for your best deal.
Start Using It
The lender purchases the asset. You take delivery and start using it immediately.
Own It Outright
Make your final payment and the asset is 100% yours. Simple as that.
Key Benefits
Fixed Payments
Know exactly what you pay each month. No surprises. Easy budgeting.
Guaranteed Ownership
The asset becomes yours when the final payment is made. No end-of-term uncertainty.
Depreciation Deductions
Claim depreciation on the asset throughout the hire period as a tax deduction.
Simple Structure
One of the simplest finance structures. Easy to understand and manage.
Eligibility Requirements
Example Finance Scenario
An electrician purchases a new Ford Transit Custom van with custom fit-out using hire purchase.
Asset Value
$72,000
Term
5 years
Monthly Payment
~$1,400
Balloon
Nil
With no balloon, the van is fully owned after 60 monthly payments. Interest and depreciation are tax deductible. Example only.
Frequently Asked Questions
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