Asset Finance Leasing

Types of Asset Finance Leasing

There are three main types of Asset Finance Leasing.  They all have their plusses and minuses and some are more appropriate than others, depending on your situation. 

It is always best to ask for advice when it comes to Asset Finance Leasing, prior to signing any agreement!

A good place to start is in our forums.

A brief overview of the main types of asset finance leasing are below. 

Hire Purchase

- Is normally taken over 2-5 years. At the end of the lease period the asset becomes yours.  There are tax benefits from day one.  Beware that the VAT on the whole amount is normally payable at the beginning of the lease agreement.   It's good for budgeting as the fiance is a fixed regular payment.  If the asset is taken care off correctly it can maintain a value on the Balance Sheet.   Hire purchase asset finance leasing is a good method of finance for second hand assets or asset that have a longer working life.  Arrangements with suppliers tend to be relatively uncomplicated compared with other types of leasing finance.

For example purchasing a car through asset finance, with a relatively moderate rate of 6.7% and needing to borrow £10,000 over three years gives a monthly repayment of £306.50 for that asset.   However, that is a very high rate.  Rates can be as low as 3-4%.

Finance Lease -

-Is similar but at the end of the leasing agreement you get to sell the asset.  And you get to take a percentage of the profit!  However, the asset belongs to the lender for the length of the finance lease agreement.

Operating Lease -

- The lender has more of risk on this in that they risk the asset losing it's value over the period of the lease agreement.

Get more information on operating lease here.

or

Get a quote here.

Asset Finance Leasing can be a great way of rocketing your business, without huge caschflow impact.