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How Hire Purchase works
Hire Purchase is a way to acquire the equipment you need for your business because you get to choose, use, and repay the assets over an agreed period, typically over a five-to-seven-year period, or the useful life of the asset.
The regular instalments cover the capital cost of the asset and the interest. At the end of the term of the Hire Purchase agreement, once all repayments have been made, ownership of the asset is transferred to you.
Who is Hire Purchase for?
Hire Purchase is appropriate for businesses that need to invest in modern, up-to-date equipment while keeping control of their cash flow (monthly outgoings) by knowing what their investments are going to cost them over the long-term, meaning they can budget effectively.
Benefits of Hire Purchase include:
- More time to repay: By spreading the cost over the life of the asset, you can lower the initial up-front payment. This matters because it gives you a long-term view of the fixed monthly payments you will need to make over the term of the agreement, which – in turn- helps you with your budgeting
- Low-start: By starting with lower payments, it gives time for an asset to start paying for itself, matching your cost (outgoings) with your income
- Keep control: With Hire Purchase, you're in charge. It gives you full use and control of the asset throughout the repayment period
- Tax efficient: Financing your asset using Hire Purchase can be tax-friendly, offering potential tax benefits
- Reclaim VAT: If you're VAT registered, you may be able to reclaim VAT. For Professions unable to reclaim VAT, for example Dentists, we are able to fund the VAT over the term of the agreement, which offers additional cash flow benefits.
- For details on VAT registration, visit gov.uk/vat-registration/overview
An example of how Hire Purchase can work for you…
How to apply for a Hire Purchase agreement
Simply tell us what you want to buy, how much you wish to finance, your budget, and the term you prefer. Our finance agreement will be tailored to suit you with fixed payments over an agreed term.
With our in-house specialist underwriters providing quick decisions the funds will be paid into the supplier’s bank account.
Finance is secured against the asset and/or equipment. If you're unable to keep up with your payments we may repossess the asset and/or equipment.
Products and services are subject to eligibility, status, terms and conditions and availability. All lending is subject to status and our lending criteria. The right to decline any application is reserved.
