How Does It Work?
- The asset finance lender buys the item that you are looking to acquire.
- A 10% deposit is usually paid and the item is then leased from the funder for a pre-agreed term.
- Once the term expires, you choose whether you wish to keep the item. If you do, simply pay the balloon payment and take full ownership.
Is Hire Purchase Right For My Business?
There are a number of considerations when deciding on the right asset finance product for your business. Whether hire purchase is right for you will depending on the following:
How Long Do You Need The Item For?
If you’re thinking of acquiring an item that will only be needed for a short time, then hire purchase may not be the most suitable route. Depending on how long the item is needed for, short term hire or leasing would most likely be a more flexible and therefore suitable option.
When Will The Item Need To Be Replaced?
If the item will soon be replaced by a newer version, and will become redundant, shorter term, more flexible options such as a lease may be the better route.
What Is The Depreciation Profile Of The Item?
Where depreciation is minimal, hire purchase can be a great option. Items that depreciate quickly should consider leasing the item, if the item will not be retained for a very long time. Where the item will be used for a long time, the residual value may be less of a factor in the financing decision.
To get started with your hire purchase application, enquire online or call us on 01922 620008. Our advisors will talk through your requirements and where possible, issue written terms within two hours of your initial conversation.