Finance Lease
Finance Lease is a type of leasing arrangement where a business rents an asset for most of its useful life while taking on most ownership risks and benefits. The business does not legally own the asset during the lease, but typically has the option to buy it at the end.
Why It Matters
A Finance Lease helps businesses use vehicles or equipment without paying upfront and may allow the asset to be treated off-balance-sheet depending on the structure. It’s widely used across Vehicle Finance, Equipment Finance, and Low Doc Asset Finance for tradies, truckies, cafés, and clinics.
How It Works
- The lender purchases the asset.
- Your business leases it for a fixed term.
- You make regular lease payments.
- You may choose to buy the asset at the end for its residual value.
Compare leasing vs buying: Lease vs Buy Equipment.
Common Use Cases
- Businesses wanting to avoid upfront purchase costs
- Clinics and cafés upgrading fitout or equipment
- Tradies and contractors using high-cost machinery
- Truckies needing reliable trucks without owning immediately
Related Switchboard Resources
For tax guidance on leasing, see ato.gov.au.
Do I own the asset in a Finance Lease?
No. You only have the option to buy at the end, depending on the agreement.
Is Finance Lease off-balance-sheet?
Sometimes — it depends on your accountant and reporting requirements.
Is a Finance Lease Low Doc friendly?
Yes — many lenders offer Low Doc lease products for ABN holders.