Commercial HP

Commercial HP

A Commercial Hire Purchase (CHP) agreement is a contract to purchase equipment on a set term with a fixed rate. Ownership of the equipment is transferred once the final payment has been made. Security is taken over the equipment financed, leaving your property free for other lending. With each repayment you are increasing your equity in the equipment. CHP is ideal for a business that wants full ownership at the end of the term
Advantages of a CHP are:
  • Freedom to reduce the amount financed using a deposit, or you can finance 100% of the asset cost
  • Option to structure the transaction with a balloon or fully amortise the finance
  • Tax benefit through interest paid and depreciation on the equipment