Compare the arrangement, not the label
| Question | Equipment loan | Lease |
|---|---|---|
| Who owns the equipment? | The business generally buys it; the lender may hold security | Ownership generally remains with the lessor during the lease |
| How are payments made? | According to the loan schedule | According to the lease agreement |
| What happens at the end? | Check any final balance and security release | Check return, purchase or other contractual options |
| Who maintains it? | Usually the business | Depends on the agreement |
Swipe or scroll the table sideways to see every column.
Think about how long you need the asset
A durable machine that fits a long-term operating need can raise different questions from equipment you expect to upgrade frequently. Compare the useful period with the commitment and the cost of ending it early.
A lease is not automatically flexible or maintenance-inclusive. Check the obligations, return condition and any residual or purchase terms.
Keep tax claims specific
Tax, GST and accounting treatment vary with the arrangement and your circumstances. Ask your accountant to review the actual documents. A broad claim that a product is tax-effective is not enough to establish that it is suitable.
Include all payments and the end position when comparing total cost. Also consider the responsibilities for insurance, servicing and breakdowns.
Common questions
Do I automatically own leased equipment at the end?
No. The lease terms determine the options and obligations.
Is hire purchase the same as a lease?
It is a different structure. Ask how and when ownership transfers and compare the specific agreement.
General information only. Product terms and availability vary. Check the actual proposal and obtain advice appropriate to your circumstances.