Finance Lease
A Finance Lease allows businesses to spread the cost of the full value of the asset over time, giving full use of the item without technically owning it. A flexible, tax-efficient way for your business to acquire the equipment without using up cash reserves.
- Financing for up to 100% of purchase price
- VAT payable on rentals each month so it’s not necessary to pay VAT on equipment cost up front
- Flexible payment structure agreed at outset which can be designed to match cash flow if required
- Using this method, the finance company buys the equipment and remains the owner of the asset
- Tax relief usually given on the rentals
- On balance sheet funding
Benefits of a Finance Lease
- Low initial outlay - Quick access to the asset you need without a heavy upfront investment
- Flexibility - Rental payments and lease periods can be designed to match your cash flow
- Cash back - Receive most of the income from selling the asset if you choose to do so at the end of the lease
- Tax efficient - Rentals can usually be offset against pre-tax profits
- Reduce costs - Reclaim VAT on rentals
Hints and Tips
Before submitting an application for funding, here are some useful tips about what finance companies like to see:
- Recent management accounts
- Last 3 months bank statements
Funders will consider applications where a company has a history of:
- Losses
- Adverse credit issues
- Bad debts