Menu
You need the truck on the road this month, but writing a cheque for the full purchase price would gut your working capital. A commercial hire purchase lets your business use the asset immediately, pay it off in instalments, and take legal ownership the moment the final payment clears.
Under a commercial hire purchase, the lender buys the asset and hires it to your business over an agreed term. You have exclusive use of it from day one. You cover the running costs, the insurance, and the maintenance, exactly as you would if you owned it outright.
The distinction is title. Legal ownership sits with the lender until the last instalment, including any balloon, has been paid. At that point title transfers to your business automatically, with no option fee and no further paperwork. It is a rent to own structure built for commercial assets.
If the asset is tangible, holds resale value, and is used predominantly for business, it can usually be financed:
You will generally need an active ABN and an asset used predominantly for business purposes. Lenders then assess trading history, cash flow, credit conduct, and the asset itself. Newer businesses, sole traders, and applicants with impaired credit are not automatically ruled out. Low doc pathways and specialist lenders exist for these situations, though pricing will reflect the additional risk carried by the lender.
Tell us what you are financing and we will come back with structures, indicative rates, and a clear view of the trade offs against a chattel mortgage or lease. Free, no obligation, and no mark against your credit file.
Business owners tend to ask the same questions before settling on a structure. These are the ones that come up most often.
A commercial hire purchase is a finance arrangement where a lender buys the asset and hires it to your business over an agreed term. Your business has full use of the asset from day one and makes regular instalments that cover the purchase price plus interest. Legal ownership stays with the lender until the final payment is made, at which point title transfers automatically to your business. It is often described as a rent to own structure for commercial assets.
The difference is when ownership transfers. Under a chattel mortgage your business owns the asset from settlement and the lender simply holds security over it. Under a hire purchase the lender retains title until the last instalment clears. This affects GST timing, balance sheet treatment, and how interest and depreciation are claimed. Neither structure is universally better. The right choice depends on your accounting basis, cash flow, and how quickly you want the asset in your name.
You will generally need an active ABN and an asset used predominantly for business, usually more than 50 per cent. Lenders assess trading history, cash flow, credit conduct, and the age and resale value of the asset. Established businesses with clean credit see the widest range of offers, but newer businesses, sole traders, and applicants with impaired credit can often still be placed through low doc arrangements or specialist lenders on our panel.
Most tangible business assets qualify. Common examples include utes, vans, trucks, trailers, and prime movers, along with excavators, forklifts, agricultural machinery, workshop plant, commercial kitchen equipment, and medical or dental fit outs. The asset needs to hold identifiable resale value, since the lender retains title as its security. Highly customised or consumable items can be harder to place and may suit an unsecured business loan instead.
Businesses registered for GST on an accrual basis can generally claim the GST on the full purchase price up front, in the BAS period the agreement begins. Cash basis businesses claim GST as each instalment is paid. Depreciation and the interest component of instalments may also be deductible where the asset is used for business purposes. Tax treatment depends on your circumstances, so confirm the position with your accountant before signing.
Yes. Many commercial hire purchase agreements allow a balloon, sometimes called a residual, which is a lump sum owed at the end of the term. Deferring part of the principal reduces your regular instalments and protects working capital. The trade off is more interest across the life of the agreement and a final sum you will need to pay out, refinance, or cover from the sale of the asset. We model both structures so the numbers are clear before you commit.
Title transfers to your business automatically once the final instalment, including any balloon payment, has been paid. No separate purchase or option fee is required in a standard commercial hire purchase. Until that point the lender is the legal owner, though your business has exclusive use of the asset, carries the running costs, and is responsible for insurance and maintenance under the agreement.
Approval timing depends on the lender and how complete your application is. Straightforward applications with clean credit and standard documentation are frequently assessed on the same day, and around 95 per cent of applications submitted through Thor Finance are processed within one business day. Low doc applications, unusual assets, or complex ownership structures may take longer. Settlement follows once the supplier invoice and signed documents are returned.
No. Requesting an indicative quote through Thor Finance does not touch your credit file. We assess your position and match you against suitable lenders before anything formal is lodged. A credit enquiry is only recorded once you instruct us to proceed with a specific lender, so you can compare structures, terms, and balloon scenarios without leaving a footprint.
Yes, though the terms vary between lenders. Some calculate a rebate on unearned interest, others apply an early termination fee or a fixed administrative charge. Because the lender holds title until payout, the discharge process also needs to be completed before you can sell or transfer the asset. If you expect to upgrade before the term ends, review the payout conditions during the comparison stage rather than after settlement.
Thor Finance ABN 31 629 922 589 is an Authorised Credit Representative #557246 of AFAS Group Pty Ltd, Australian Credit Licence #414426. Information on this page is general in nature and does not take into account your objectives, financial situation, or needs. Tax outcomes depend on individual circumstances. Consider seeking advice from your accountant or a qualified adviser before entering into any credit contract. Approval, rates, and terms are subject to lender assessment.
Email us to let us know how we can help you with your business’ Loan requirements.
Thor Finance
ABN 31 629 922 589
Contact us to see how we can help you with your finance requirements
Thor Finance ABN 31 629 922 589 is an Authorised Credit Representative
#557246 of AFAS Group PTY LTD, Australian Credit Licence #414426.