Finance leases let you rent the equipment for a set amount of time but ongoing costs such as maintenance and repairs become your responsibility. It’s an effecting way to get large equipment in place with minimal outlay.
If you wanted a more complete solution, an Operating Lease is a similar product that usually comes with a maintenance contract – generally there are return conditions you must adhere to.
How does it work?
Essentially, the assets you require are bought on your behalf by the Lender. This is then leased back to you over a period of time and set repayments will have been agreed upon within the loan terms. As the lessee, you choose which supplier you want the lessor to buy from, and they’ll be paid directly from the Lender. Your repayments are sent to the Lender until the full amount has been paid.
What are the Benefits of a Finance Lease?
No Upfront Costs
Not all businesses have available funds to support a brand-new purchase. But when you need a cash injection to keep on top of your competitors, what do you do? Finance Leases don’t require an upfront cost. Your repayment amounts are agreed upon between you and the lender, meaning you have a regular amount to pay each month whilst keeping the bulk of your money within your bank for any unexpected expenditure.
Fixed Payments
Knowing how much you’re repaying each month provides more control and reassurance over your finances. It also helps manage cash flow within your business; allowing you to invest in other areas, deal with unexpected costs and overall, make it easier to budget.
Flexible Repayment Plans
By sourcing your Finance Lease via a Finance Broker like Busby Finance, we’ll help you find the right Lender to meet your requirements. We’ll also help set the best terms including the length of the agreement and reasonable repayments which fit into your budget.
Tax Advantages
The total cost of finance lease rental payments are tax-deductible as a business expense against taxable profits. This means payments can be offset against taxable profits. The payments qualify for tax relief for the duration of the lease agreement and can be used to help reduce the business’s overall tax bill.
Instant Access to Assets
The reason a business is looking to purchase new assets is usually that they need to keep operations running or they’re looking to develop their brand further. A Finance Lease allows companies to access, use or install the rented resources straight away. Avoiding any business downtime.