Hire Purchase: The Flexible Option For Affordable Ownership
Hire Purchase lets the eventual owner of an asset pay for it gradually, giving financial security and predictability. It’s very flexible, with a wide range of options for the deposit amount, repayment amount and repayment frequency. Payments can even be matched to a seasonal income cycle. Because all terms are agreed upfront, Hire Purchase also gives protection against any increase in interest rates.
Benefits Of Hire Purchase:
- Accurate budgeting with fixed interest and repayments
- The interest element included within payments can be registered as a business expense and is therefore tax allowable
- The cost of the equipment can be tax allowable through Annual Investment Allowances or Writing Down Allowances
We’ll agree an interest rate with you which will fix your repayments throughout your contract. This means you’re in complete control, and will find it easier to manage your budget.
Once your Hire Purchase agreement ends, you’ll own the equipment outright when all payments have been made.
Finance Lease: Reduce Your Up-front Outgoings
A Finance Lease gives access to the latest equipment for a regular sum that can be offset against taxable profits. The initial cost is also very low, because all payments are spread across the whole repayment period.
Benefits Of A Finance Lease:
- Low initial cost with all payments (including VAT) repaid across the contract period
- Tax efficient because asset repayments count as a business expense
- Allows accurate budgeting
- Maintenance costs can be included in the repayment plan
You won’t own the equipment at the end of a Finance Lease. However, you can offset the remaining value as a deposit towards new equipment if you want to upgrade to the latest innovative Manitou machinery.
Operating Lease: Lower Rentals, Same Quality Equipment
An Operating Lease is a smart way to access and operate the latest equipment with minimal risk. The asset and all payments due under the agreement sit off balance sheet which may help to improve some key accounting ratios. At the end of the contract the equipment is returned to us. If all return conditions are met, there’s nothing more to pay.
Benefits Of An Operating Lease:
- Low total cost and low initial cost, with all payments (including VAT) repaid across the contract period
- Tax efficient because asset repayments count as a business expense
- Allows accurate budgeting with minimal risk
- Maintenance costs can be included in the repayment plan
Because there’s no option for ownership at the end of your agreement, you also don’t need to worry about depreciation.
