Equipment Rental/Operating Leases

What is Equipment Rental?

Equipment rental or commonly known as operating leases are an agreement to rent equipment without the liability of a residual value at the end of the term. In other words, at the end of the leasing term, the equipment is handed back to the leasing company. This can be a very efficient strategy if you have a need for continually upgrading your equipment.

What is the usual lease term for Equipment rental?

The usual terms are between 1 to 7 years, longer terms can be arranged with the leasing company but it will depend on the type of equipment being leased.

Can I purchase second hand goods with Equipment Rental?

Unlike finance leasing, commercial hire purchase and chattel mortgages, equipment rental is restricted to new equipment. This particular product is typically seen in fleet vehicles where a company wants to maintain a new vehicle fleet with minimal liability.

What about tax deductibility and GST?

As this is a lease arrangement, the full rental payment is tax deductable and the GST is incorporated into each payment.
If you are unsure about the suitability of this product or require taxation advice, please contact your accountant to see if this is a suitable option for your business.

If you require further assistance, please contact us.