Leasing is an agile method of procurement and subject to your particular circumstances, can have certain tax, cash flow, and balance sheet advantages, when compared to straight forward purchase.
Leasing is a financial agreement where you are able to choose exactly the equipment you need, without the worry of a large initial outlay. You are able to remain in complete control of the procurement process, so you select the manufacturer / supplier you prefer, you agree with them the exact specification of the goods that you need; which means you are often able to get the equipment you wouldn’t have been able to afford with outright purchase.
With leasing, ownership of the asset in question does not transfer to your business. Instead the asset’s value resides with us and you simply pay an agreed value each month for a defined period to use/access/operate the item. Because this is a business ‘cost’ it is put through the profit and loss account rather than hitting the balance sheet. Where relevant the leasing rental attracts VAT and because it is treated as a cost, the VAT can often be reclaimed, so long as you are VAT registered or eligible.
Subject to the terms of the lease, at the end of the original agreement you can simply return the asset to us or if you still require it; there is often an option for the leasing arrangement to renew or continue. If your need for that item (be it a vehicle, IT solution, plant or machinery) no longer exists, the asset remains in our ownership and your payments cease.
Operating leases are often more cost effective than outright purchase, lease finance or hire purchase because we take the risk of the value of the equipment at disposal and the sum of the lease payments you will have paid in the primary term will total less than the original value of the item/asset. In some cases, the lease may include other costs such as planned maintenance or servicing – subject to the nature of the item being leased.
We have provided operating leases for a wide range of vehicles, plant, machinery, products and equipment and in some cases for older items which would not pass high street lenders criteria, so if you want to consider leasing as a means of purchase, contact us today.