Asset Purchase, also called commercial hire purchase is undertaken when a business wishes to own the equipment or assets they need but cannot purchase them outright. An asset purchase agreement is entered into when a business wishes to purchase goods such as vehicles, business plant and equipment, office equipment or luxury assets.
A business and financier will enter into a legally binding agreement whereby payments are made regularly (typically every month) over a fixed term and at a fixed rate until the term of the loan is up. There can also be the option of a balloon payment. If the full term of the loan is not run and the loan is paid off early there may be charges in some instances.
There are several options available for the repayment of asset purchase agreements including the payment of GST depending on the depreciation and use of the equipment being purchased and whether the business wishes to claim back GST payments in a lump sum.
Please contact us for more details.
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