Capital lease finance for business

Last updated: 6 September 2022

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  • want to invest in high-value equipment which has a medium or long lifespan, that isn’t going to become outdated quickly.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

Contract length

  • 1–5-year contract
  • 1–3-month agreement period

On the balance sheet, so you can claim tax on:

  • Lease payments
  • Equipment depreciation

Additional benefits

  • 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.

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How it works

  1. The financier will purchase the equipment and leases it to you over an agreement period.
  2. At the end of the agreement, you have the option to:
    1. return the equipment to the financier
    2. buy the equipment from the financier
    3. 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.

Want to know more? Get in touch with:

Sustainability Victoria's finance team who can help you through this process.

Correct as at November 2019

Disclaimer: The information provided in this document is general advice only. It does not take into account your particular needs or objectives and does not constitute legal or accounting advice. Accordingly, any comments or statements made are not a recommendation that a particular course of action is suitable for you and you need to seek your own legal, tax and accounting advice in relation to your specific circumstances.