How does our Hire Purchase work?
Hire purchase is a popular business finance solution for those who require cars or equipment but do not have the available funds to buy them up front. It is sometimes referred to as a lease purchase term.
When you choose to finance an asset via hire purchase, an initial deposit is required, and the VAT must be paid upfront. You then make monthly/quarterly payments for a fixed period. At the end of the hire purchase agreement, you can become the legal owner of the asset through an ownership title fee. You can also look to take ownership of the asset earlier than agreed by making a lump-sum payment to settle the remainder of the finance.
What are the benefits of using Hire Purchase?
- Spread the cost - Hire Purchase allows you to pay back over the life of the asset, as opposed to a large upfront cost
- Keep control - You are the owner of the asset for tax purposes and can normally claim capital allowances
- Fixed interest – with both the interest rate and payment amounts fixed and agreed from the outset, you are able to budget more effectively
- Ownership – the asset can be yours at the end of the agreement