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Hire Purchase Leasing

This is a method for acquiring assets. It appears as an asset on your balance sheet and when you've finished the repayments, you own it. Tax and balance sheet considerations are therefore exactly the same as for a cash purchase, but without the initial drain on your cash flow.

Potential advantages of hire purchase leasing

	Cash Flow Retention – we provide up to 100% finance. Cash can then be retained for other purposes.
	Profit Forecasting & Budgeting - contracts are fixed for an agreed period and involve fixed payments, allowing you greater accuracy in budgeting and cash flow forecasting.
	Flexibility - you have the option to select the term and the timing of repayments to suit your cash flows.
	Tax Advantages – capital allowances and interest charges relating to hire purchase transactions are tax deductible, provided the equipment is used to generate assessable income.

Lease with option to purchase financial overview

Structured in a similar way to Lease Purchase in that at the end of the agreement you can opt to purchase the asset for a predetermined figure. Alternatively, the goods can be returned to the Lessor, or the supplier, dependent on the terms of the agreement. Final payment is the projected future value (residual value) of the asset at the end of the term. The final residual payment is removed from the payment calculation, making monthly outgoings lower than for an equivalent hire purchase agreement.

At the end of the agreement you have the flexibility of three options:

	Make the final payment and take ownership
	Hand back the asset without making the final payment, subject to pre-agreed usage conditions.
	Re-finance the asset for a further period, subject to status.

Potential advantages of a lease with option to purchase

	Easier budgeting
	Opportunity to acquire the asset at the end of the period for a predetermined figure
	Preserves other lines of credit

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General financial planning and advice

Great British Finance Limited are authorised and regulated by the Financial Services Authority (FSA). The FSA does not regulate some forms of Mortgage, Inheritance Tax Planning, Credit Cards, Personal Loans, Deposit Accounts & Insurance. If you are submitting an online request, we would advise to read our KeyFacts statement, links are at the top and bottom of this page.