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Finance Explained

Lease / Hire Purchase

A simple repayment facility, this will provide outright ownership at the end of the financial agreement. Repayments can be fixed and structured in a flexible way, for example a balloon payment can be applied to reduce the monthly repayments.
 

Benefits:

  • Better Cashflow 

  • Flexibility

  • Tax Efficient

Refinancing

This allows you to release capital tied up in your assets in order to give an immediate capital injection to your business. Alternatively, subject to agreements with other finance companies, assets can be refinanced by extending the term, leading to a reduction in monthly commitments. These funds could be used to recover from bad debt or reduce bank overdrafts. We can also arrange a refinance agreement to fund a ‘balloon rental’ that is due on a vehicle.

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Benefits:

  • Better Cashflow

  • Debt Consolidation

Operating Lease

This is a rental agreement which can be used to finance a broad spread of business assets but is particularly effective for financing heavy commercial vehicles. The Funder builds in a residual value to reduce the rentals, thus helping cash flow and making ‘off-balance sheet’ funding possible.

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Benefits:

  • Up-To-Date Equipment

  • Better Cashflow

  • Tax Efficient

  • Debt Consolidation

Personal Contract Purchase

Similar to Hire Purchase (HP) a PCP agreement has a few differences. One is that the car’s Guaranteed Future Value (GFV) is calculated at the beginning of the agreement, comparatively to HP Finance, you pay against the total value of the car. Whereas for a PCP agreement you pay for the deprecation of the car. A PCP agreement gives you the flexibility to decide whether you would like to own the car outright at the end of the agreement by paying the deferred value (GFV).
 

Benefits:

  •  Flexibility

  • Usually Cheaper Than HP

  • Better Cashflow

  • Low Monthly Payments

Leasing
 

A finance lease is a method of financing a vehicle that is usually accessed by VAT-registered businesses and companies, however sole traders and partnerships can also take advantage of finance lease. It is a form of car finance where the vehicle remains the property of the finance company, with the vehicle effectively hired out to a business. The business can then use this asset while paying an effective rental rather than a repayment.

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Benefits:

  • Low Monthly Costs

  • Flexibility

  • Sales Proceeds

  • Tax Efficient

Balanced Payments
Plan

A variable interest rate product which has fixed monthly payments.The interest rate is linked to a base rate which is usually Libor. Any adjustment required will be made at the end of the agreement.

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Benefits:

  • Interest Rate Savings

  • Pay No VAT

  • Low Deposit

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