Hire Purchase

• Easy online application, apply for finance in minutes
• Receive two competitive quotations from approved lenders
• Repayment periods from 1 month to 60 months
• Finance available from £5,000 to £150,000

What is Hire Purchase?

Hire Purchase is a lending facility that gives you access to funds in order to purchase business assets such as office equipment, machinery and vehicles. The business will pay the financier in instalments, which means the item appears on the balance sheet, and because your business owns the asset you'll be responsible for maintenance and insurance costs.

The agreement usually involves regular monthly payments for the use of the asset over an agreed period of time and sees the final payment transferring title in full to your business.

Asset Finance can be used to fund any business assets, ranging from photocopiers and forklifts to cars and aircraft.

Approval Considerations

• It’s possible that an asset valuation may have to be carried out by an independent surveyor which may incur a small cost to the business, this is to ensure the true value against which the funder is able to lend
• Generally, the item should be removable and clearly identifiable, so it can be taken as security for the loan
• The finance is secured against the physical asset, thus providing the lender with the reassurance that if things go wrong and you can’t keep up with repayments, they can take the asset to recoup their losses
• The VAT will become payable by the business at the point of purchase

Why use Hire Purchase?

• It allows the immediate purchase of equipment that might otherwise be unaffordable
• It provides the business access to equipment needed without incurring the cash flow pressure of an outright purchase and allows a staged repayment
• Agreements can be tailored with flexibility on both the term and repayment schedule to support cash flow
• The business owns the asset outright once the final payment has been made
• Hire Purchase is an excellent budgeting tool as payments are usually fixed, allowing the business improved cash flow management
• Treat a Hire Purchase facility as a balance sheet item and claim any capital allowances available

Does my business qualify for finance?

The following is a brief guide to the acceptance criteria for finance, but is not a guarantee. All circumstances will be considered and an assessment will be made on an individual case by case basis.

• Business to be trading for a minimum of two years
• The business is profitable
• No legal notices or insolvency proceedings
• Defaults must be over two years old and not more than £1,000 in value or a reasonable explanation must be provided/evidenced
• Be a registered business within the UK
• UK homeowner (Minimum of one director)
• The loan amount is less than 25% of the business annual turnover (Revenue and Turnover will be assessed to confirm affordability to this level)

How do I know if this facility is right for my business?

From the above information, you should be able to establish if this is the best product for your business, but we would always encourage you to discuss all options with your accountant to ensure you make the most of your working capital.