Asset Finance

Finance used to purchase/refinance business equipment; Vehicles, Stock or “Soft Assets” (example: I.T. Equipment/software)

Hire Purchase – Own the “asset” outright at the end of the Term
Contract Hire – Rent the Equipment for an agreed period of time
Operating Lease & Finance Lease – flexible finance option, low upfront costs without owning the Asset outright

For clients who want to own the “asset” at the end of the Term.

Lender purchase the “Asset” and agrees a payment plan to fit their budget
Client pays VAT upfront and makes own arrangement for maintenance, repairs and servicing.
Client can purchase the “asset” at the end of the Term
TAX Advantages –
1. Reclaim VAT – if registered
2. Could claim Capital Allowances
3. Off-set payment interest against their “Profits”
Client chooses how Finance is structured; flexible deposit; fixed payments with option for a balloon payment at end of the agreement.

For the client who wants to rent equipment at a fixed monthly fee with service included.

Easy Budgeting for maintaining the equipment
Frees up Capital. VAT spread across each payment so up-front costs are lower.
Tax efficient – 100% of rentals paid normally off-set against taxable profits.
Simple and Straightforward
Off-balance sheet funding– Equipment doesn’t depreciate on the clients balance sheet
Higher productivity – Equipment could pay for itself through rentals matching income.

When the Client wants to use an asset without buying it outright.

Lender buys the Asset and client “leases” it for a monthly fee.
VAT calculated on the monthly fee, not at outset.
At end of the Primary Period, customer can either hand the Asset back, sell to a third Party on Lenders behalf or continue to rent it after the Primary period.
Tax Advantages
1. Frees up Capital – VAT paid with each rental. Keeping costs down
2. Tax Efficient – Asset payments counted as business Expenses.
3. Cost control – Easy budgeting for maintaining equipment. With option to include maintenance costs in the repayment plan.

Allows the client to use the Asset for a set Term without the potential risk of owning it outright.

No deposit or VAT
Customer benefits from a lower monthly fixed cost because the rental is based on the Asset’s residual value.
At end of Primary period customer can continue to lease based on fair market value, subject to the Lenders Agreement.
TAX Advantage – As for Finance Lease EXCEPT – Equipment doesn’t depreciate on the customers Balance Sheet.