Finance Options

A Commercial Hire Purchase (“CHP”) is a finance arrangement where the financier purchases an asset on the customer’s behalf and hires it back to them for a fixed monthly repayment for a specific term. This arrangement is also known as a Hire Purchase (“HP”) or a Corporate Hire Purchase.

Under a Commercial Hire Purchase, the financier purchases the chosen asset on the customer’s behalf and hires it back to them over a specified period of time. The customer retains full access and use of the asset for the term of the contract, but does not take ownership of the asset until the contract term is completed and any residual (final instalment due) has been paid.

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A Chattel Mortgage is a finance arrangement where ownership of the asset is held by the customer from the time of purchase, although the financier ‘mortgages’ the asset as security against the loan.

Under a Chattel Mortgage, the financier provides funds for the customer to purchase and take ownership of the asset (chattel). The financier registers a “mortgage” over the asset as security against the loan. Once the contract term is complete and any balloon (final instalment) has been paid, the financier releases the charge.

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A Finance Lease is a finance arrangement where the financier purchases the asset and leases it to the customer (lessee) for a fixed monthly rental over a specified lease term.

During the term of the lease agreement, the lessee pays the monthly rental to the financier and does not obtain ownership or equity in the vehicle. At the end of the lease, the lessee has the option of paying out the residual to take ownership, financing the residual, trading in the asset or returning the asset to the lessor.

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An Operating Lease is a finance arrangement where the lessee agrees to lease the motor vehicle for a predetermined period, and then the vehicle is handed back to the leasing company at the end of the term.

Under an Operating Lease, the financier purchases the motor vehicle and leases it to the customer (lessee) for a fixed monthly rental over a specified lease term. At the end of the lease term, no residual is payable by the lessee and the vehicle is handed back to the leasing company who assumes the residual value risk of the vehicle.

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A Novated Lease is a finance arrangement which involves the salary sacrifice of the monthly lease rentals, which are paid by the employer on the employee’s behalf, from their pre-tax salary.

A Novated Lease is a method of financing a car over a fixed lease period, which involves a three-way agreement between an employer, their employee and a financier. A “Novation Agreement” is established which transfers the employee’s obligations under the lease contract to the employer, allowing the employer to make lease payments to the financier via a salary sacrifice arrangement (ie. from the employee’s pre-tax salary).

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A Consumer Loan is a finance arrangement where an individual borrows funds to purchase an asset and the financier secures the loan against that asset.

Under a Consumer Loan, the financier provides funds to purchase an asset and the customer takes ownership of the asset from the time of purchase. The asset it used as security against the funds borrowed. Once the loan is fully repaid, the financier removes the security hold over the asset and provides the customer with clear title over the asset.

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Southgate provides our customers with access to a range of home loan finance solutions through our preferred business partner. If you are looking for a new home loan or would like to review the suitability and competitiveness of your existing arrangements, Southgate is happy to introduce you to an Account Manager.

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