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Director of Merricks Media Ltd

There are various forms of leasing, the most popular being Finance Lease and Contract Hire

Finance Lease

Typically you will source the asset from your preferred supplier and agree a price directly with them

Through Finance 7, a lease facility will be agreed, and the lease company will purchase the asset on your behalf after the paperwork has been completed

You will then pay monthly or quarterly rentals to the lease company for the length of the agreement, typically between 1-6 years. As you are in effect renting the equipment, all rentals are subject to VAT

At the end of the agreement you may continue to use the asset by paying a small annual rental known as a “peppercorn rental”.

When you no longer need the asset you either scrap it if has no value or sell it and keep the bulk of the sale proceeds

So a Finance Lease gives you

• Ability to source the asset from your preferred supplier
• High levels of funding
• Flexibility
• Spread the cost of acquiring new assets over their useful life
• Finance secured on the asset, normally removing the need for additional security

 

Sale & Leaseback

This is a leasing facility that allows you to raise finance against assets you already own.

The leasing company will typically purchase the assets off you for an agreed sum, typically between 60-80% of their market value, and then lease them back to you under a Finance Lease, as detailed above

You continue to use the assets as before, and there is no interruption to your daily business

Typically only large valuable assets are suitable for a Sale & Leaseback facility

So Sale & Leaseback gives you

• Ability to raise additional working capital from assets you already own
• High levels of funding
• Flexibility
• Spread the repayment of the capital injection back over the useful life of the assets
• Finance secured on the assets, normally removing the need for additional security

 

Contract Hire

With a Contract Hire facility, you will tell Finance7, exactly what asset you are looking to acquire and we will get you quotes for a monthly rental to hire the asset for an agreed period

The Contract Hire company will purchase the asset from their preferred supplier and arrange for delivery direct to you

You will pay an agreed monthly rental for the period of the agreement, typically between 1-5 years, and at the end of the agreement you give the asset back to the Contract Hire company, and that is the end of your liability

Contract Hire is mainly used to fund vehicles such as cars, vans, tractor units, coaches, etc.

Many Contract Hire facilities have an option to add the cost maintenance of the asset in to the monthly rental

So Contract Hire gives you

• Ability to use an asset without the risks of ownership
• Known monthly costs aid cashflow
• Ability to spread the cost of maintenance over the hire term
• No need for large deposits
• Rentals allowable against taxable income
• Finance secured on the asset, normally removing the need for additional security

 

What next? To be one step closer to getting the finance you need

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