Finance Guide: Hire PurchaseOctober 8, 2015
Following the news that the British Business Bank has funded an increased supply of asset finance options for SMEs by providing a £100 million facility to Hitachi Capital UK, we thought it would be a good idea to run down a few of the most common types of asset finance. We’ll start with hire purchase, which you might already be familiar with – it’s often used to finance personal purchases of cars.
- Hire purchase is a form of asset finance, a way for businesses to use essential physical assets without paying for them outright.
- Hire purchase has the advantage of working as an installment plan. Once the business has finished making the payments, they’ll own the asset permanently.
- The process will begin with a deposit, which will be a percentage of the total value of the equipment. Once they pay the deposit, they will have immediate access to the equipment, and they’ll continue by making monthly payments that include interest.
- As with other forms of asset finance, hire purchase comes with built-in security, so approval rates are usually high – but just like every loan, this depends on the business’ situation. If they have poor credit, they might have a harder time being approved.
Whether you’re a professional advisor researching funding options for a client or a business owner looking for a way to bring in some extra capital, you’ll enjoy our series of Finance Guides – all the information you need in a short and simple package.
Rangewell’s innovative online portal has mapped the entire market of SME finance in order to provide small businesses and their advisors with finance options tailored to their specific needs. If you’re interested in hire purchase, we’ll use our extensive market map of thousands of loan products from over 200 business lenders to connect you to whichever option suits your situation best.
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