A Finance Lease allows businesses to access equipment or machinery (assets) without damaging cashflow.
Instead of buying costly assets up front, SMEs can instead choose to pay for them over an agreed timeframe, gaining instant access to the assets or equipment.
In deciding if leasing is the right option for you, relevant factors may include:
- Whether you have the money to buy outright;
- How long you need the goods for;
- Costs of the different options.
Asset finance is unlikely to be suitable if you are not sure if you will need the asset(s) for the minimum contract period or if the asset is unlikely to be maintained and kept in a useable condition for the minimum contract period.
You should be aware:
- You will have to continue to pay for goods for the agreed period or settle the outstanding balance early even if you no longer need the goods, or if the goods cannot be used (funders usually offer a small rebate of interest charges in the event of an early settlement).
- If you change goods during the agreed minimum rental period, this could lead to higher charges.
- You do not own the goods at the end of the Agreement
Bearing those considerations in mind, a Finance Lease can bring many great benefits to your business too.
Benefits of leasing:
- No major upfront costs – Don’t let a purchasing budget hold you back. Leasing removes the need for significant outlay, allowing you to put your cash to better use.
- Pay as you earn – Get use of the equipment immediately, without having to find the full sum up front. Only the first scheduled payment is normally required to begin the agreement and it is usually taken by Direct Debit.
- Fixed payments – Lease rental payments and interest are fixed, which makes budgeting and forecasting easier.
- Open to all – From limited companies to sole traders, all business types are eligible for a finance lease.
- Tax benefits – Finance lease rentals can be 100% tax deductible against profits, depending on your business circumstances. We recommend seeking independent advice from your accountant for more information.
For more help in deciding whether to select asset finance, see the UK Government’s Business Finance advice
To request a quote or to learn more, get in touch.