Rent To Own

Rent To Own

What is Rent To Own?

This product offers an alternative to traditional options such as equipment leases and gets you the equipment you want today.

Typically used when standard financiers can’t or won’t approve your finance due to lack of trading figures or even a previous credit issue.

Small business or even start up businesses can sometimes have trouble accessing the finance they need and this provides them with a quick affordable option. Normally only 12 months (but can be longer if required) it can also be useful when you only need equipment for a short period of time.. General rule of thumb is it should be business critical equipment. i.e. The equipment is essential for the business to operate and increase revenue that outweighs the cost of the finance.

Tax and GST

Simply classed as a rental, the repayments are 100% tax deductable. There is no GST on the purchase price as you don’t own the asset but you can claim the applicable GST on the rental payments. The asset can be handed back usually after a minimum 6 months period or purchased for the agreed value.

Cost of Finance

The true cost is affordability and achieving what you need. The rentals are typically more expensive than traditional finance but when you weigh up against the fact you are not able to obtain any other finance it can be short term pain for long term gain. With the applicable tax deductions the difference may not be as much as you think and its a great way for new businesses to establish a repayment history making it easier to obtain finance at the end of the rental period.