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Finance Lease

A Finance Lease allows businesses to spread the cost of the full value of the asset over time, giving full use of the item without technically owning it. A flexible, tax-efficient way for your business to acquire the equipment without using up cash reserves.

  • Financing for up to 100% of purchase price
  • VAT payable on rentals each month so it’s not necessary to pay VAT on equipment cost up front
  • Flexible payment structure agreed at outset which can be designed to match cash flow if required
  • Using this method, the finance company buys the equipment and remains the owner of the asset
  • Tax relief usually given on the rentals
  • On balance sheet funding

Benefits of a Finance Lease

  • Low initial outlay – Quick access to the asset you need without a heavy upfront investment
  • Flexibility – Rental payments and lease periods can be designed to match your cash flow
  • Cash back – Receive most of the income from selling the asset if you choose to do so at the end of the lease
  • Tax efficient – Rentals can usually be offset against pre-tax profits
  • Reduce costs – Reclaim VAT on rentals

Hints and Tips

Before submitting an application for funding, here are some useful tips about what finance companies like to see:

  • Recent management accounts
  • Last 3 months bank statements

Funders will consider applications where a company has a history of:

  • Losses
  • Adverse credit issues
  • Bad debts