Q: Why not buy the equipment outright?

A: The benefits of using finance provide a strong case against cash purchase. If you buy the equipment outright your money is effectively tied up in and asset which will loose its value in time. Financing on the other hand, allows you greater flexibility to spend your cash reserves on other business needs, particularly those that are unforeseen, whilst having the use of the equipment you have financed.

Q: But I always want to own my equipment?

A: In today’s business environment, it is often the use of the equipment that is more important. The only appreciating asset you are likely to have will be property. Tying up capital in depreciating assets is not good business practice. There are also solutions to this issue and use of the equipment beyond the Lease term.

Q: Will the rental amount change?

A: Lease payments will only change if the Government chooses to increase the rate of Corporation Tax or makes amendments to the VAT Rate. Otherwise all payments are fixed for the duration of the agreement, and are not subject to increases in base lending rates.

Q: Are payments affected by inflation?

A: Payments made throughout the life of the agreement are not affected by inflation. The real cost of finance will reduce over time as the value of money depreciates.

Q: Do I have to arrange insurance for the equipment I have financed?

A: Yes. You can either insure the equipment to its full value on your existing policy, or most funders can arrange the necessary insurance cover for you as part of your agreement.

Q: If I sell my business will I have to settle the agreement?

A: Most funders will agree to either an early settlement (with a discount in charges) or if you require they will consider transferring the agreement to the new owners.

Q: Is it cheaper to use cash than finance?

A: The net cost of financing may be less than you think! In the case of Lease, rentals are usually fully allowable against taxable profits, thus reducing your costs by up to 40%.

Q: Is it not better to go to my Bank?

A: In most cases not. Banks tend not to offer tax advantageous Leasing. Furthermore most Bank borrowing is interest variable and repayable upon demand, leaving you exposed to your Banks demands.