Commercial Hire Purchase (CHP) / Finance Lease

For many organisations the need to be able to own the equipment at the end of the lease term is paramount. When acquiring assets that have a long useful life, it can make financial sense to take advantage of the benefits of an ownership product, like a CHP or Finance Lease, so as to amortise the cost of the equipment over a specified period. This will allow ownership to pass to your organisation once the final payment has been made at the end of the initial term.

Furthermore, ownership products provide the following benefits:

• No major cash outlay
• Known cash flows for the term of the agreement
• Ability to incorporate the major costs of the acquisition
• Gives title to the equipment

Note, when acquiring technology-based assets (such as computers and networking equipment), ownership products are typically considered unsecured lending and would normally be fully amortised.

However, when acquiring motor vehicles or boats, it is accepted that the asset will still have a value at the end of the initial term and balloon payments would be set in accordance with Government recommendations and guidelines.