FAQs

CHP is a form of asset acquisition credit which is used to purchase, not rent or hire, business assets such as plant, machinery and equipment.

A balloon is optional with HP. It is a percentage of the loan amount requested which is due to be finalised after the final repayment.

Ownership of goods financed with CHP is transferred to the operator when all payments have been finalised.

The interest portion only of HP payments is deductible. The tax deduction is realised through depreciation of the asset in line with ATO schedules at the time of purchase.

Cash accounting accounts for invoices and expenses at the time they are received or paid. Accruals accounting accounts for invoices when issued and expenses when bills are received.

Commercial credit facilities allow for the assets being financed to be used as collateral for the loan. Whether additional security is required is subject to individual lender guidelines and assessment of the application.

All types of business assets may be financed with CHP. Where IT and computers are considered assets for a business, they may be approved for commercial credit.

Start-up operations without full financials and with turnover for less than 12 months may not meet criteria as set by some lenders. They may seek lenders and brokers that offer Low Doc and No Doc credit options.

A balloon is due for payment in full after the last repayment is made. A balloon may be refinanced, subject to lender approval.

Interest rates on all commercial credit applications are subject to the lender’s assessment of the application and credit score. This includes an assessment of the goods. Rates can vary for new and used goods.