Operating Lease

This type of Finance is a variation of a Finance Lease, where the cost of operating an asset is incorporated into the monthly lease instalment.

For example, in the case of a vehicle, the cost of the vehicle itself as well costs of running expenses (such as servicing, maintenance, tyres, Registration) are calculated as part of the monthly instalment.

This offers the convenience of a single instalment to cover all assoacited costs of a leased asset.


Amount of Finance

  • generally from $20,000 with total (100%) of the total cost being financed

Term of Finance

  • generally from 1-5 years

* (may vary depending upon the nature of the goods)

Residual Value
(Balloon Payment)

  • payment structure is determined by ATO guidelines, particularly regarding residual value of the asset


  • monthly payments are fixed for the duration of the term, but can also be structured to take into account seasonal or irregular income

Nature of Goods

  • motor vehicles
  • trucks
  • plant, machinery or equipment
  • new or used

Conserves Working

  • allows the acquisition of required capital equipment without using operating capital for funding.


  • select the length of the finance contract and structure the repayments to suit cashflow.

  • cash outflow (money paid) can be varied to match cash inflow (money coming into your business)

  • the term of the finance contract will be matched to the expected life of the asset, ensuring that payments are not being made on equipment that is no longer contributing towards income.

Tax Deductibility

  • instalments are treated as a “rental” and therefore do not comprise “principal & interest".

  • the instalment itself is treated as an “expense” and tax deductibility will be determined by the extent to which goods are being used to generate assessable income.

  • the GST component of the acquired asset is not financed, but GST applies to the monthly instalment and residual values. Eligible borrowers can claim the GST as an ITC.

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