Hire Purchase

Hire Purchase...

Keep your cash in the bank but still acquire the assets you need for your business with a Hire Purchase Agreement, a flexible alternative to paying large sums of money outright for industry assets.

Hire Purchase agreements allows you to acquire an asset and spread the cost through affordable monthly repayments. Giving you the flexibility to budget for in your business outgoings, and allowing you to acquire the tools you need for your business. Payments can be defined to suit you and your budget, with repayment terms ranging from 12-72 months, we can put together an arrangement that works for you, and at the end of the agreement you will own your asset outright.

When a VAT deferral is put in place it helps the business reduce its upfront cost, whereas without it the business would normally have to pay the deposit and the VAT up front.  Normally 10% deposit and 20% VAT so an overall deposit of 30%.  To help SMEs purchase needed equipment lenders often offer this type of structure to minimise upfront costs and help cash flow. Even though the VAT is deferred the lender still actually pays the VAT at the point of sale, giving the business the 3 months to claim the VAT back from HMRC, this is then collected along with a monthly payment in line with their VAT quarter.

There are a number of benefits to using Hire Purchase, including;

– At the end of the agreement you will have full ownership of the asset
– Easy to incorporate into your monthly business expenditure
– Keeps your cash in the bank, rather than tied up in assets
– Agreements are flexible, you can settle the amount early or make over payments throughout the duration of your agreement
– Option to defer VAT payment for up to 3 months to support cash flow.

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