Hire Purchase (or lease purchase) allows you to spread the cost of your asset over a longer period. Repayments are regular, and you have the option of buying the item at the end of the agreement.
Hire purchase can be beneficial to a business as it negates the need to pay out a lump sum for the purchase of an item. In addition, hire purchase agreements tend to benefit from fixed monthly repayments, which can make forecasting financials much more straightforward.
During your hire purchase contract you are generally responsible for maintenance costs for the asset. The likely costs of maintenance should be considered on top of the monthly repayments.
The finance lease is designed to give business owners the option of borrowing an asset for a fixed period, rather than purchasing it outright. This can be beneficial to cash flow, as new equipment does not have to be paid for upfront and also avoids asset depreciation.
At the end of the contract, you still have the option of purchasing the asset. Alternatively the item can be sold, with some asset finance companies even giving your business a share of the proceeds.
Asset refinance is used to release capital from assets back into the business and is designed to aid cash flow. Asset refinance allows a business owner to sell their asset to the asset finance provider before leasing it back on agreed monthly payments.
The capital released not only provides a boost to the bank balance but the company still benefit from the use of the asset.
If you’re keen to find out how asset finance could benefit your business and get an unbiased quote, enquire online or talk to one of our asset finance team on 0800 088 6008.