Leasing and Hire PurchasePublished on 9th November 2016 - Last update on 13th December 2017
Two of the most popular methods of asset acquisition amongst business owners include leasing and hire purchase solutions. No matter what stage your business is at or what sector you specialise in, these two finance products can help secure all the equipment you need to provide a multitude of services and run day-to-day operations. Yet despite the intent behind these products, they function in two different ways.
An option that allows businesses to borrow assets. Rather than claiming ownership, you’ll instead borrow the equipment you need for an agreed period of time, during which you’ll be required to make affordable monthly payments, plus interest. For many business owners this is an ideal method because maintenance and repair cost are still the provider’s responsibility and you can present a potential buyer should you choose to keep the asset once the term is concluded.
If you’re a business owner seeking to own equipment or machinery, but lack the necessary funds for an outright payment, hire purchase can help. Popular amongst factories, depots, storage centres, wholesalers, construction firms and many more, hire purchase allows you to make use of an asset and eventually claim full ownership. But before you receive the asset and are able to make full use of it, you are required to pay an initial deposit pertaining to 10% of the asset’s total worth. From here on, you’ll then commence with repaying the remaining sum through monthly payments. Once full payment has been made, plus interest, ownership of the asset passes onto you.
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