Leasing Info & Help
Asset Finance
Contents
- Why lease/HP business equipment?
- Wouldn't a bank loan be better for me?
- What if I need to add onto or upgrade my equipment in the future?
- What happens at the end of the lease contract?
Why lease/HP business equipment when I could buy it outright?
Your business capital can be used to expand and make profit within your business. Leasing lets you pay for your new business equipment or technology as it works for you, just as you pay your employees. In this way, you conserve your usable capital and make budgeting for new technology easy and more flexible when you need it in the future.
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Wouldn't a bank loan be better for me?
Whilst banks often fund equipment and machinery they are essentially providers of short and long term funding not medium term. Many companies wish to protect their working capital facilities and hence choose to fund hard assets with asset finance. Cashflow is crucial to business as everyone knows and leaving plenty of headroom for bank facilities is prudent.
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What if I need to add or upgrade my equipment in the future?
Normally a new lease is struck but the period can be co terminus with the existing lease, to provide a fixed end period. Likewise part settlement of a lease provides a flexible way of upgrading without rolling forward debt
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What happens at the end of the lease contract?
There are 2 options - either an annual peppercorn payment which simply continues the lease. The peppercorn is typically the equivalent of one months rental. Alternatively the goods can be sold to a third party for fair market value and the lease retains 95% of the sale proceeds.
