Equipment Finance

Leasing Benefits

1. Better Cash Flow.
Leasing gives you access to the asset with minimal up-front payments and spreads the cost over time. It allows you to pay for the asset with the income it generates, while minimising the drain on your working capital.

2. No Debt.
An operating lease preserves your credit options and does not influence your credit limit, as it is generally not classified as debt but as expense. It is also treated as 'Off Balance Sheet Finance'.

3. Maximise Financial Leverages.
Your lease can often finance everything related to the purchase and installation of the asset and may free up cash flow to pay for items such as training and stock.

4. Simplified Cash Flow Management.
Lease payments are usually fixed, making cash management more predictable and easier than with a variable rate loan. The fixed interest rate of a lease also helps if interest rates rise.

5. Tax Advantage.
Operating lease payments are generally tax deductible just like depreciation charges and are made with pre-tax money. Cash purchases, in contrast, are made with post tax earnings. Hire purchase agreements allow the lessee to claim capital allowances.

6. Flexible Time Frames.
Leasing contracts can be structured to fit your requirements. Use an asset as long as you need it without owning a depreciating asset.

7. Additional Advantages.
Some leases offer additional advantages such as cancellation options or asset maintenance.

Types of Asset Finance

We can generally distinguish three major types of leasing:finance leasing, operating leasing and contract hire. Although strictly speaking not a type of leasing, we also include hire purchase in the following discussion:

Finance Lease (Full Payout Lease). You effectively acquire all financial benefits and risks without actually acquiring legal title. The leading rate is computed to collect the full value of the asset (plus finance charges) during the contract period. At the end of the lease, the asset is sold to a third party and you can receive a share of the sale proceeds (if the lease is not being extended).

Operating Lease. The leaser expects to be able to either sell the asset in the second-hand market or to lease it again and will therefore not need to recover the total asset value through lease payments. There may be an option to extend the leasing period at the end (this negotiation can only take place at the end of the initial rental period). As with finance leases, you will not be able to become owner of the asset at any time.

Contract Hire. A form of operating lease (often used with cars and other vehicles) that includes a number of additional services such as maintenance, management or replacement if asset is in repair.

The Premier Lease. Specifically designed for large corporate customers, NHS trusts or local authorities this form of asset finance is the lowest cost available in the industry. The low risk to the leaser is reflected in extremely low lease costs of 1-2% below Bank of England base rate. The benefits are immediate and the cost is considerably less than normal market rates. If you are a supplier of capital equipment and your customer base is in the low risk end of the market you may be charging your customers far more than necessary. Talk to us about the Premier Lease option.

Application

To apply for this product, please follow the steps and fill out our application form. Alternatively you can call us on 0871 666 5476 or request a callback.