In a Hire Purchase arrangement your company can purchase your equipment or vehicle outright. You pay a deposit, generally based on a percentage of the purchase price, with the balance spread over a specified term with specified monthly payments. You then have to pay all the VAT on the purchase price but it is generally recoverable, providing you are VAT registered, or a number of our funders will lend the VAT until you have reclaimed it for a small additional fee.
The benefits of this arrangement are the known/planned payment and commitment, with no extra costs if interest rates increase. The interest is deductible against any profit and you can claim Capital Allowances. You can show the asset on your balance sheet and after the final “option to purchase” it’s yours. We can also arrange your refinance using a hire purchase agreement, referred to as Sale and Hire Purchase Back.