Commercial Hire Purchase Calculator
Calculate CHP repayments, total interest, tax and GST benefits for businesses financing equipment or vehicles in Australia.
Percentage of finance amount deferred to end of term. Enter 0 for no balloon.
Tick if your business is registered for GST โ you may be able to claim the GST input credit on the asset
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Frequently Asked Questions
What is a Commercial Hire Purchase (CHP)?
A CHP is a business finance arrangement where the lender purchases the asset and hires it to you for a fixed term. Ownership transfers to you at the end of the term once all payments (including any balloon) are made. Unlike a lease, you can claim depreciation and interest as business deductions.
Can I claim GST on a Commercial Hire Purchase?
If your business is GST registered, you can claim the full GST input tax credit on the asset purchase price in your next BAS, rather than spreading it across repayments. This is a significant cash flow advantage of CHP over some other finance structures.
What are the tax benefits of CHP for businesses?
Interest payments are tax deductible, and the asset is depreciable under Division 40. Under the ATO's instant asset write-off (where eligible), you may be able to deduct the full asset cost in the year of purchase. Consult your accountant for your specific entitlements.
What is a balloon payment and should I use one?
A balloon payment defers a percentage of the loan to the end of the term, reducing regular repayments. It suits businesses that want to free up cash flow during the loan and plan to refinance, sell the asset, or pay from business profits at maturity.
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