Hire Purchase and Lease Purchase
Hire Purchase – also known as Lease Purchase – is a straight forward finance arrangement where you pay for an asset in monthly instalments. Hire Purchase is a type of asset finance solution that brings you exceptional flexibility.
It gives you the certainty of fixed costs for the duration of the agreement, this is generally over a fixed period of 24 – 84 months with also a fixed interest rate.
Hire Purchase agreements are a type of credit, most commonly used to purchase assets for a company.
The creditor remains the legal owner of the goods until the remaining sums have been repaid under the agreement.
The VAT element of Purchase Price is paid upfront by you, along with any deposit you may also be putting in. You will re-claim the VAT element in your quarterly / monthly repayment.
Sometimes there may be a nominal fee / option to purchase fee at the end of the agreement. This amount is generally modest and always known at the point of signing any documentation.
The benefits of Hire Purchase:
• The asset stays on your balance sheet
• The monthly repayments do not attract VAT
• You will own the asset when repayments are made in full.
At Richmond Asset Finance Ltd we want to help you find the right finance package for you. Hire Purchase may or may not be the right finance package for you, and we want to help to find the best solution for your business.