The real cost of 0% financing

Published on 28th January 2016 - Last update on 4th March 2019

When you’re looking to finance a vehicle or a piece of equipment you’ll be looking around for the best deal. On the surface that usually looks like the lowest percentage. In this case 0% – meaning you’re paying nothing but the cost of your asset – seems ideal. But many business owners don’t know about the hidden costs behind 0% financing, and how it’s often not your best option.

Late last year a client came to us through one of our partners with what appeared to be an unbeatable offer. She needed to purchase a piece of equipment that would expand her business’ offering and help her reach more clients, and she’d been offered a great deal by a specialist bank: £19,995 for the equipment and 0% financing.

One member of our team with years of experience in business finance knew that was probably too good to be true, so he set out to find a better offer for our client. After a little detective work with the manufacturer, he found out that the base cost of the equipment was actually only £15,000 if paid for in full, upfront. When we found her another loan with a different provider at 15%, that came out to £19,400 in total – saving the cafe owner £500 that she could put back into her business. And that’s not all: she was offered 15% because her business was new. More established businesses could find loans at even lower rates, potentially paying over £1,000 less than they would with the 0% financing offer.

This isn’t the only time Rangewell and our partners have beaten 0% finance offers. It’s easy to think they’re the best deals on the market, but business owners need to watch out for the hidden costs that always accompany low interest rates. That’s where we can help: our dedicated team work directly with our network of over 300 UK business lenders to give you access to the offers that really save your business money – not just the ones that look good on the surface.

If you want to be part of a story like this one, click here to get in contact with our finance team.


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Sarah Thornton

Content writer
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