Finance Types

Finance Options Available

Most finance arrangements involve paying a deposit and then monthly payments. The key difference between products is what happens at the end of the agreement and who gets title to the equipment.

Here are some of the main forms of financing we help source.

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HIRE PURCHASE

At the end of the agreement, there is an option to purchase the asset. If the option is not taken up, the equipment needs to be returned to the lender.

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CONDITIONAL SALE

At the end of the agreement, you automatically take ownership of the equipment.

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LEASE

At the end of the agreement, there is no option to purchase. The agreement can usually be extended, you may be offered the option to sell the asset on behalf of the lender, or the equipment can be returned to the lender. You do not get title.

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PERSONAL CONTRACT PURCHASE (PCP)

At the end of the agreement there are three options. Pay the final lump sum payment, refinance the lump sum amount or hand the vehicle back to the finance house. You need to note there may be a charge for this if the vehicle has done more than the agreed mileage or any damage is present on the vehicle other than general wear and tear.

There are some other options also available, but these will be discussed with you to see if they are more suitable.

In deciding which option to select, relevant factors may include:

  • How long you expect to use the asset for
  • The income or corporation tax, VAT and accounting treatment of the product

Find Out How Asset Finance Can Help You

Discuss your options, get a free quote or learn more about our services

Suitability of Asset Finance

Asset finance may not be suitable in certain circumstances. You should be aware:

 

  • You will have to continue to pay for the equipment for the agreed period even if you no longer need the equipment or it cannot be used
  • If you change the equipment during the agreed minimum rental period, this could lead to higher total payments
  • Asset finance is unlikely to be suitable if you are not sure if you will need the equipment for the minimum contract
  • Asset finance is unlikely to be suitable if you are not sure the equipment will be maintained and kept in a useable condition for the minimum contract

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