Hire Purchase
What is hire purchase?
Commercial hire purchase allows your business to purchase an asset through a series of instalments to an asset lender, maintaining your cash flow whilst avoiding the need to pay for the asset outright. The leasing company purchases the equipment on your behalf before leasing it back to you for hire. Your business will then own the asset once the repayment period is over, although you will be responsible for its maintenance throughout the hire contract.
What are the benefits of hire purchase?
- Hire purchase reduces the impact of an investment on your cash flow by avoiding purchasing the asset outright.
- The interest on a hire purchase contract is typically less than the interest accompanying a bank overdraft or a business loan.
- The combination of these two factors allows instant access to equipment carrying a higher specification.
- Because you are treated as the asset’s owner, it is possible to claim capital allowances against tax on commencement of the hire contract.
- Hire purchase keeps your working capital free to reinvest in your business through the likes of mergers and acquisitions or MBO/MBI activity.
Is hire purchase right for my business?
Whichever asset finance solution best suits your business, Hilton-Baird Financial Solutions has access to the right asset lenders on the market, so we can identify the tailored hire purchase facility that will meet your business’ cash flow needs.
Please call our team today on 0800 9774833 to find out more about hire purchase, or alternatively email info@hiltonbaird.co.uk.