What is Lease Financing?
Lease Financing refers to when a lending provider purchases an asset on your business’s behalf and you then make fixed monthly payments in order to have use of it. Lease Finance is an effective solution in a range of situations and is especially ideal for your business if you require access to equipment but do not want to take on the responsibility and expense of outright ownership. Your business will have use of the asset for as long as you require and can return it once you no longer need it or often purchase it at the end of the term.
The benefits of Lease Financing
- Cost effective access – Lease Financing can be more cost effective than purchasing the asset outright, depending on the length of your rental period. Leasing the equipment as and when required can also avoid the cost of storing and maintaining the equipment, which can be costly over a period of time. This is especially advantageous if you will be using the equipment infrequently or seasonally.
- Lower tax payments – As your business is merely leasing the equipment, VAT will be paid on the rental cost rather than a purchase cost, leading to a reduced tax bill. Leasing costs are also considered a trading expense, which in some instances may make it possible to deduct them out of your business’s taxable profits.
- Access to better equipment – The use of Lease Financing can provide your business with access to better equipment which is too expensive to purchase outright, giving you a competitive edge.
- Preserves cash flow – Lease Financing is an excellent way to protect your businesses cash flow and ensure it can continue meeting its day to day financial obligations, whilst the fixed nature of the repayments allows for effective budgeting, planning and forecasting.
- Can upgrade equipment regularly – Leasing your assets allows you to trade them in for the latest model at regular intervals, ensuring you are always operating with the latest equipment.
- Avoid depreciation – Taking full ownership of an asset means you stand to lose money through depreciation if the time comes where you wish to sell it. Lease Financing avoids this problem by allowing you to simply return the equipment to the lender once you have finished using it.
Who is Lease Financing for?
Lease Financing is a flexible solution that is ideal for a range of businesses in most industries. Lease Financing is likely to be of particular benefit to your business if you are looking for a flexible and cost effective way of securing access to a particular asset, without the expense or responsibility of purchasing it outright. Your business may also benefit from Lease Financing if you require access to assets that are too expensive to purchase, depreciate fast, or are quickly superseded by more advanced models.
How can Wffinancesolutions.co.uk help?
Whilst the concept of Lease Financing is relatively straightforward, finding a provider that caters to your business requirements at the best possible price is much more challenging, especially with the baffling range of lenders available. Wffinancesolutions.co.uk has years of experience and an unmatched level of industry insight, so we are best placed to offer you advice and introductory services to match your needs. For a free no obligation consultation on how Lease Financing could be right for you, get in touch today.
With a Contract Hire facility you tell us exactly what asset you are looking to acquire and we will get you quotes for a monthly rental to hire the asset for an agreed period.
The contract hire company will purchase the asset from their preferred supplier and arrange for delivery direct to you.
You will pay an agreed monthly rental for the period of the agreement, typically between 1-5 years, and at the end of the agreement you give the asset back to the contract hire company, and that is the end of your liability
Contract hire is mainly used to fund vehicles such as cars, vans, tractor units, coaches, etc.
Many contract hire facilities have an option to add the cost maintenance of the asset in to the monthly rental
So contract hire gives you
- Ability to use an asset without the risks of ownership
- Known monthly costs aid cash flow
- Ability to spread the cost of maintenance over the hire term
- Rentals allowable against taxable income
- Finance secured on the asset, normally removing the need for additional security