- Products
- There are a number of methods for financing, as detailed below:
- Hire Purchase/Lease Purchase
- A minimum deposit of 10% plus the VAT (on the cost of the asset) is normally required
with the balance repayable over 2 - 7 years, depending on the asset.
- VAT deferments are possible.
- Repayments can be either fixed for the agreement term or variable linked to money costs.
- The asset and associated HP are shown on your balance sheet.
- Your business claims any writing down allowances for offsetting against tax.
- When the finance agreement has been repaid you own the asset.
- Finance Lease
- Deposit and terms are similar to HP
- VAT is paid on the rentals as they fall due.
- Unlike HP, you can never own the asset because the leasing company retains title so that it can claim the tax allowances.
- At the end the primary period you pay nominal annual rentals.
- When you wish to dispose of the asset, which must be to a party unconnected with your business,
you will receive a rebate in the region of 95% of the sale price.
- The asset and associated lease debt is shown on your balance sheet.
- The rentals you pay are tax deductible.
- Operating Lease
- A rental contract for periods of 3 to 5 years
- The rentals are calculated on the difference between the cost of the asset
and what the finance company considers it will be worth at the end of the term.
- Rentals paid are tax deductible.
- The asset and operating lease liability do not appear on your balance sheet.
- At the end of the contract you return the asset to the Lessor,
provided that its condition is in accordance with the contract, no further payments will be due.
- Refinance
- Refinance of assets you already own can also be arranged to release capital for other projects such as:-
- Assisting in the financing of management buyouts/ins (MBO's/MBI's)
- Acquiring businesses from other owner or out of receiverships.
- Raising working capital for expansion.
- Financing the purchase of intangible assets.
