Hire Purchase allows a business to acquire an asset and spread the cost of that asset over an agreed term of 24 to 84 months. Ownership will then pass to the business at the end of the term on payment of an option to purchase fee.
This facility allows a business to acquire critical operating assets with ever increasing capital costs and budget effectively with fixed repayments. Variable interest facilities are also available from a number of lenders which benefit from reductions in the Bank of England Base Rate and minimal costs for early settlement.
Deposits start from 1 month and the vat can be paid upfront or deferred for up to 3 months to tie in with monthly / quarterly vat returns. A balloon payment can also be considered at the end of the hire purchase agreement to reduce the monthly cost.
Hire Purchase allows a business to keep their cash in the bank rather than tied up in assets. It also allows a business to benefit from the government’s Full Expensing scheme on qualified assets to deduct 100% of the cost of the asset from pre tax profits in the same financial year and retains its status as a tangible asset on the balance sheet.
Other types of Asset Finance
Morse Business Finance can provide a number of funding solutions.
Hire
Purchase
Spread the asset cost over an agreed period, gaining full ownership at the end of the agreement.
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Finance
Lease
Spread the asset cost and vat over an agreed period, with ownership typically remaining with the finance company.
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Operating Lease
Spread the asset cost over an agreed period with repayments substantially lower than hire purchase or finance lease. Ownership remains with the finance company.
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Sale & Hire
Purchase Back
Allows a business to sell an asset purchased within 90 days back to the finance company and then spread the original asset cost over an agreed term.
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Refinance
A way to release capital on assets already owned by a business by selling them to the finance company and spreading the valuation cost over an agreed term.
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VAT
Loans
Defer the VAT on asset purchases for up to 4 months on hire purchase or spread the vat over the agreed repayment term on a finance lease / operating lease.
Commercial
Loans
Spread the cost of non-asset related purchases over an agreed term, eg expansion, acquisition, fit-outs, IT upgrades.
Growth Guarantee
Scheme Loans
Available for asset purchases with a 70% government guarantee and spread the cost over an agreed term. Conditions apply.
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