Boat Lease or Finance Lease

A finance boat lease is a commercial boat loan where the boat financed must be used to generate taxable income such as a charter boat or a commercial fishing vessel. The finance provider or bank will purchase the boat on your behalf and you will then rent or lease it back from the finance provider or bank for a fixed term. A fixed rental or lease payment is paid at regular intervals for the term.

Your boat lease will finance the full purchase amount and the residual value will be predetermined. The residual value will be calculated using the ATO's depreciation guidelines for the particular age and type of boat you are leasing and it's intended use. This amount should reflect what is considered to be the 'Future Value' of the boat at the end of the agreed term. Finance for the full purchase amount is ex GST but the financier will still pay the GST at the time of settlement. A boat finance lease is an 'off balance sheet' style of funding meaning that the boat will not appear on your balance sheet, subsequently nor will the contingent liability, protecting equity you have in your business.

Finance boat lease terms

Terms generally range from 12 to 60 months (occasionally longer), repayments are made in advance and can be made monthly, quarterly, bi-annually, or yearly.

Taxation implications for a boat lease

You will claim the full cost of the monthly leasing or rental payment. The monthly payments will attract a GST charge as will the residual payment. These Tax Input Credits will be claimed with your regular BAS. You do not claim depreciation or interest as you are not deemed to be the owner of the goods.

Who does a boat lease suit?

A boat lease may suit those who seek a simplified method of accounting, as depreciation and interest do not have to be calculated, or for those who are want to have an 'off balance sheet' style of funding. Be sure to investigate chattel mortgage and commercial hire purchase options as well. You may well find that costs over the entire term of the loan are similar for the various facilities, if the term and residual are the same. However with leasing the amount borrowed is fixed and so is the residual, this could result in a higher overall cost, if your monthly budget allows for a higher repayment than the lease dictates. You may be able to borrow a smaller amount or have a lower residual and have greater savings with a chattel mortgage or commercial hire purchase. Attention again should be paid before signing a contract, that the term of the loan, the residual value and the monthly repayments are in line with your short and long term requirements.

Which boat loan option is right for you?

Deciding on the right Boat finance option for your situation can sometimes be confusing, Commercial Hire Purchase, Chattel Mortgage, Boat Lease are just a few of the boat financing options, Platinum Direct Finance can assist with your decision making and make the process simple and easy. Use our "Which boat loan product is right for you?" today!

Why use Platinum Direct Finance?

The Platinum Direct Finance group of companies will finance over 800 million dollars worth of equipment and car finance this year! Due to this volume and buying power, we can give our clients access to the best boat finance rates and boat financing products across Australia.

Need further information?

Either complete the friendly boat finance enquiry form and one of our boat finance experts will contact you shortly or talk to an experienced finance consultant on 1300 554 553.