Capital lease is a contract where a financier buys renewable or energy efficient equipment for a business who pays it back over time.
Suitable for businesses that:
- want to invest in high-value equipment which has a medium or long lifespan, that isn’t going to become outdated quickly.
Project size: More than $7500
No upfront capital or security
You do not own the equipment but you are responsible for maintenance
- 1–5-year contract
- 1–3-month agreement period
On the balance sheet, so you can claim tax on:
- Lease payments
- Equipment depreciation
- You have the option to extend your lease, buy or return the equipment to the financier at the end of the agreement.
- You can upgrade the equipment once the agreement is complete.
How to apply: Most major banks and financiers offer capital lease financing. Contact your bank to find out more.
How it works
- Find a financier who offers capital lease financing. Your bank is a good place to start.
- The financier will purchase the equipment and leases it to you over an agreement period.
- At the end of the agreement, you have the option to:
- return the equipment to the financier
- buy the equipment from the financier
- continue to lease the equipment, usually at a very low cost.
Your business’ creditworthiness may have an impact on finance availability or rates.
Get a discount for your energy saving project
The Victorian Government offers businesses a discount on energy saving products that are installed by accredited Victorian Energy Upgrade providers. Check which energy saving products are registered for a discount.
The Clean Energy Finance Corporation is currently facilitating discounted financing for energy efficiency and renewable energy equipment upgrades through some of the major banks and financiers.
We advise you to always seek advice from your accountant and legal representative when entering financial agreements.
Visit the Victorian Energy Saver for a list of simple tips to save energy in your business.