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Commercial Hire Purchase

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What is a Commercial Hire Purchase (CHP)?

A Commercial Hire Purchase (CHP) is a facility under which you obtain goods by hiring them over the term, with title transferring to you after the last payment.

It will suit your company if you use the ‘accrual’ (turnover >$1m p.a.) method of accounting for GST. It may also be suitable if you use a car for business related purposes.

Under the ‘accruals’ method, the GST component of the purchase price can be claimed back on your next Business Activity Statement, rather than claiming the GST over the term of the finance contract.

Commercial Hire Purchase Features

  • You can either finance the total purchase price or use a deposit or trade-in to reduce the loan repayments
  • You do not become the owner of the equipment until all payments are made under a CHP arrangement
  • You can even use the GST refund to contribute towards paying off the loan, thereby reducing the amount financed and the interest paid over the term of the loan
  • You can have a balloon payment at the end of the term that will reduce the payments during the term
  • You can structure the repayments with or without a balloon payment at the end thus tailoring your repayments to suit your cash flow

Commercial Hire Purchase Benefits

  • Claim a tax deduction for the depreciation as well as the interest paid each financial year
  • GST is not payable on the repayments as they are calculated using the GST inclusive price
  • Subject to credit approval, finance 100% of the purchase price
  • The repayments are fixed over the term
  • You can choose terms from 1 to 5 years
  • You gain equity in the equipment over the term
  • No GST is charged on the payment

Other Equipment Finance Options

A Commercial Hire Purchase might not be the best option for your business. We can also assist with the following alternatives:


It depends on your business which accounting method and product are best. Speak with your accountant to confirm.

Check out our Equipment Finance Options Page or our Commercial Finance Page for all our commercial finance options.

If you need a competitive Commercial Hire Purchase, contact us online or call 02 9453 0300 and learn how we can help you groww your business.