Hire and Lease Purchase
Hire Purchase and Lease Purchase are typically the same thing. Whether your business needs to buy vehicles, scaffolding, machinery, IT, engineering or manufacturing equipment or any other assets, using the asset as the security, hire purchase and lease purchase offer full ownership of the asset at the end of the agreement. Repayments can be monthly, quarterly or annually and can even be structured to suit your business’s cash flow cycle.
Cash Flow
Your company’s cash flow benefits by paying for the asset in instalments, rather than in one lump sum.
Upfront Costs
Most hire purchase and lease purchase agreements will require a deposit contribution. This is usually between 5% and 10% of the net cost plus all the VAT. This can be paid in cash, by part-exchange of an existing asset or we can work on an agreement for it to be deferred until the first payment. Due to the strength of our relationship with our funders, Custom Business Finance are able to obtain zero deposit contributions in some cases.
Tax
Your business can claim writing-down allowances and can offset interest payments against taxable profits. Where applicable, the full VAT will be paid at the start of the agreement or deferred in line with your VAT reclaim date to help ease cash flow.
Interest
The interest rate can be fixed or variable. We will talk to you in more detail about these options, to ensure you make an informed decision that best suits your business needs.
Currency
If you have a regular, sustainable and proven foreign currency income, we can explore the option of securing the facility in the currency you wish to repay in.
Finance Lease
This can be used for many types of assets also, including IT and security equipment, agricultural equipment, machinery, vehicles. If you don’t need to own the asset, then leasing might be the option that best suits your business. In a finance lease the repayments cover the full cost of the asset you wish to finance but ownership remains with the lessor. At the end of the lease agreement, you can continue leasing the asset by paying annual secondary repayments (peppercorn rental) or sell the goods to a third party and retain up to 97.5% of sale proceeds.
Operating Lease
Operating leases, sometimes known as ‘Op Leases’ are rental agreements with can be used to finance business assets such as heavy commercial vehicles, coaches, vans, cars and machinery. The funder will build a residual value into the lease agreement which will reduce the rental amount, helping cash flow. Businesses which need an asset for specific period or contract usually like this option. PCH (personal contract hire) is one form of operating lease which leasing companies can offer. For businesses we use the term Contract Hire.
Contract Hire
If you want to lease a vehicle or a fleet of vehicles for your business, then Contract Hire provides the solution. The contract hire rental will include the road fund licence for the vehicles and they can be hired on a fully maintained basis so you can simply insure, fuel and go.
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Ben Brown
Assistant Relationship Manager
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Chris Mangle
Executive Director
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David Catling
Executive Director
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Helen Stinson
Assistant Director
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Martin Taylor
Executive Director
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