Business Finance Brokers | Hire Purchase For Business

What is Hire Purchase?

A hire purchase agreement involves acquiring an asset and spreading the repayment cost.

It is a flexible option so your business can easily budget for the asset, taking advantage of the flexible repayment terms and fixed interest rates.

Hire purchase agreements are typically used for assets that have a registration number or a serial/chassis number.

Key Features

Usually a small deposit will be required (typically up to 10%, but this can vary depending on the repayment structure and whether there is a part exchange).
VAT on the equipment cost is usually payable by you upfront, in full, but a VAT deferral may be an option.
Documentation fee payable up front.
Regulated hire purchase agreements may have the flexibility for you to make early repayments or over-payments at any point during the agreement, without penalty.
Hire purchase is a good option for businesses looking to purchase assets that have a long term use. The duration of a hire purchase agreement is usually between 12 and 72 months.
Hire purchase gives the same Capital Allowances as if paying outright in cash.

Important Information

You will not own the equipment until all the required payments have been made, including the option to purchase fee which is payable with the final rental and any other conditions have been satisfied.
Contracts require the end user to maintain and use the asset in accordance with the manufacturer’s recommendation.
The Asset must be fully insured.
The finance company will hold title to the equipment until the Option to Purchase Fee is paid by the customer with the final payment, at the end of the agreement. Upon payment of the Option to Purchase Fee, title passes to the customer and the finance company has no further interest. Documentation fee and option to purchase fee are payable. The Option to Purchase Fee will vary depending on which finance company is used.
Contracts require the end user to maintain and use the asset in accordance with the manufacturer’s recommendation.
Your accountant will be able to provide more information. This information is provided for guidance only.

Contact Us

Contact an expert in your area to discuss whether Hire Purchase is the best option for your business.

Locate your local expert on our Contact Us page.

Alternative Funding Options

Finance Lease

Finance leasing is similar to hire purchase, whereby you pay for the goods in instalments and is generally considered to be capital leases for accounts purposes.

Contract Hire allows you to hire goods over a fixed period, before returning goods to the supplier at the end of the term. Business Finance Brokers Ltd can secure the best business contract hire rates.

Agricultural Loans

Agricultural loans are a flexible finance option, with short or medium-term finance arranged for the purchase of goods or services. Business Finance Brokers Ltd can secure the best loan rates for your business.

Business Finance Brokers Ltd is authorised and regulated by the Financial Conduct Authority, FRN: 675825. All finance is subject to status and income. Written quotation on request. We act as a credit broker and not a lender. We work with a number of carefully selected credit providers who may be able to offer you finance for your purchase. We are only able to offer finance products from these providers.

It is our intention to provide a high level of service at all times. However, if you have reason to make a complaint about our service you should contact Business Finance Brokers Ltd at The Gables, Watling Street, Burbage, Hinckley, Leicestershire, LE10 3JA. If we are unable to resolve your complaint satisfactorily, you may be entitled to refer the matter to the Financial Ombudsman Service (FOS). Further information is available by calling the FOS on 0845 080 1800 or at http://www.financial-ombudsman.org.uk