Finance Lease

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What Is a Finance Lease?

A finance lease is a type of asset finance that enables your business to lease the equipment it needs, with the option to purchase it at the end of the lease by making a final payment for a predetermined amount (residual value). The lender buys the asset and retains ownership until the end of the lease, while you get full use of the asset in return for regular payments.

This lease is generally used for long-term high-value assets such as company vehicles, medical equipment, or heavy machinery. It will often have lower interest rates than other types of equipment finance because your company takes on responsibility for maintaining the asset during the lease.

Benefits of a Finance Lease

A Finance Lease is a convenient way to spread the asset’s cost over time while using it in the interim. It comes with the option to return or own the asset outright with a final residual payment. The business will profit from the purchase if the asset is worth more than the residual.

Less initial cash investment required
It doesn’t require a deposit or security other than the asset financed
Immediate access to your business equipment once purchased
Spread the cost over the entire economic life of the asset
Generally, payments are tax-deductible and reduce the tax the business pays
Fixed repayments can be tailored to suit cash flow over the term of the agreement
Option of ownership at the end of the lease

What Businesses use a Finance Lease Loan?

Hospitality
Restaurants & cafes
Catering
Construction
Mining
Medical
Tradies
Manufacturing

How does a Finance Lease work?

The lender purchases the asset on behalf of your business. You then pay them a fixed monthly lease rental and interest for the lease term. The business often buys the asset at the end of the leasing period for an agreed price, or it returns to the lender.

The asset is listed on your business’s balance sheet, and lease repayments are generally tax-deductible. Fixed-rate payments ensure they will stay the same regardless of changes to interest rates. Your company is responsible for the asset and must cover additional costs such as repairs, maintenance, or servicing.

You’ll end up paying close to the full value of the asset over the agreed term. Your lender will decide at the start of the contract how much they expect the asset to be worth by the end, and your final payment will be based on that anticipated value.

Step-by-step Process of a Finance Lease Loan

1. Lease application

You identify the asset your business requires and apply for a Finance Lease supplying all relevant business income, profit and loss documents, equipment make and model, supplier information, price quotation, and their terms of payment.

2. Background check and purchase of the asset

The lender conducts background creditworthiness, processes lease application, and coordinates with the supplier to purchase the asset.

3. Enter into a Finance Lease agreement.

You and the finance company enter into a legal contract in which you will use the asset during the agreed lease period.

4. Make fixed payments over the term.

Your business makes fixed payments for the use of the asset over the agreed term while the finance provider recovers the asset’s cost plus interest.

5. Option to buy or return

At the end of the lease agreement, you can return the asset to the lender or acquire ownership for a predetermined amount (residual value).

How to Apply for a Finance Lease

Establish your business requirements

Contact our principal broker Brin Hayden to discuss your circumstances and begin the process. We’ll source the ideal Finance Lease provider for your needs and ensure all your crucial information is in order to secure the asset you need.

Organise and lodge application

You provide the requested completed documents and we will organise and lodge the application on your behalf. In addition to business documents, you will need to satisfy the following:

Have a valid Australian Business Number (ABN)
Supply account number and BSB of your main business account
Have been in business for at least 12 months
Asset to be used for business purposes at least 51% of the time
Meet the lender’s minimum credit requirements

Gain approval and enter lease

With our guidance, we can source a provider and assemble your application in as little as five business days. The speed of approval will depend on the asset you wish to finance and its value. Because the lender is purchasing the asset on your behalf, the process will generally take longer than other types of business loans.

Why Choose Cabbage Capital as Your Finance Broker?

Our founder and principal broker, Brin Hayden, brings over 20 years of experience in the commercial sector, focusing on financial solutions for small to medium enterprises to provide a real impact.

“We know what it takes to take your business to the next level. A Finance Lease is a cost-effective way to have the asset now and spread its cost over time. And depending on what works best for your business, you can return or buy at the end of the lease. Unlike banks or individual lenders, we’re not limited to just one or two providers. We source finance from our network of 30+ competitive lenders vying for your business. Then we negotiate the best rates and terms to fit you.

I’ll work with you to find the best Finance Lease deal to secure your much-needed assets. And I take care of the details to make it happen. Whatever your business needs to take it higher, talk to me.”

Brin Hayden

Founder and principal broker

“We know what it takes to take your business to the next level. A Finance Lease is a cost-effective way to have the asset now and spread its cost over time.”

Let’s get started

If you’d like to book a meeting to discuss your needs or start a finance application, leave your details, and we’ll get back to you within 24 hours.
Alternatively, call Brin at 0418 574 655.

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