Where ownership is not required, finance lease works well for a broad spread of business assets as well as vehicles.
- Preserves cash flow – offering the benefit of paying in instalments over a fixed period.
- Initial deposits – can be as low as one repayment / rental down with the VAT spread over the term of the agreement.
- Flexible – repayments can be structured to match anticipated cash flows.
- Tax efficient – repayments are normally offset against taxable profit.
- Cost effective – the funder, as owner of the asset, claims the writing down allowances which can then be reflected in the form of lower rentals.
At the end of a finance lease the customer can continue renting the equipment by paying annual secondary rentals. On sale of the goods to a third party the customer is entitled to percentage of the sale proceeds, often up to 99%.