Business funding to suit your needs
How does a business lease purchase work?
A business finance lease is a way to acquire assets for use even though the assets themselves remain the property of the finance company. You simply pay for the hire of the asset over an agreed period of time.
Excel -A Rate Business Services Ltd will charge you an agreed rental amount for hiring the asset. You then have exclusive use of that asset, whatever it is.
The finance lease assigns the risks associated with ownership of the asset to the finance company. Using a finance lease means that the asset will appear on your balance sheet with outstanding rental amounts being represented as a liability.
We can offer a choice of lease arrangements.
Either a fully amortised lease where the rental paid writes the asset down to £0.00 at the end of the hire term; or A part amortised lease which includes a final 'balloon rental payment' equal to the estimated value of the asset at the end of the hire term.
The balloon rental payment option is an agreed sum that you pay at the end of the term in exchange for paying a lower rental price during the contract term.
*Leases with balloon rentals are available where the asset has an intrinsic value which will be at least equal to the final balloon rental payment.
At the end of the agreed lease term we can often offer you a new lease on the asset for a secondary period at either a nominal peppercorn rental amount or a commercial rental price dependent on the value of the asset.
What are the benefits of a finance lease agreement?
* Agreed regular payments;
* Minimal costs upfront;
* Rentals are usually Corporation Tax deductible;
* Option to continue using the asset at the end of the first period; and
* Additional line of finance that will not affect core banking arrangements
What happens at the end of the lease?
At the end of the business finance lease contract you can usually opt to extend the lease or return the asset to us for sale. *This will depend on the terms of the original agreement. Alternatively, the asset could be sold to a third party by the lessee. In this instance the lessee would act on behalf of the lessor and may be given a rebate of rentals equating to a part of the sales proceeds. This will depend on the terms outlined in the lease agreement.
Contact us today for a no obligation consultation about your business finance options.