Finance Leases are commonly used to fund assets such as:
Loan Terms and Lending Criteria
The lease agreement, also known as the primary rental period, involves equal monthly payments that cover the full cost of the asset plus interest.
Unlike Hire Purchase, no deposit is typically required, and the VAT is spread across the lease term.
At the end of the primary lease term, businesses generally have three options:
Because the lease is aligned to the asset’s useful economic life, terms can often extend longer than those typically available under Hire Purchase agreements.
Pricing and Fees
Monthly payments under a Finance Lease are fixed for the term and include both the cost of the asset and applicable interest. This predictable structure allows for better budgeting and cash flow planning.
There are typically no upfront fees or deposits, and VAT is included in the monthly instalments rather than being payable upfront, which can be a significant advantage for VAT-registered businesses.
While the business never gains ownership, it may still benefit from the sale of the asset at the end of the lease term, receiving a pre-agreed portion of any resale value.
