Hire purchase enables you to eventually secure ownership of the new asset. The cost can be spread over its useful life and paid for from revenue. Payment patterns can be tailored to suit individual needs, generally involving a deposit, followed by a series of monthly or quarterly installments.

Hire purchase is suitable for individuals and businesses of all sizes. Funding is on balance sheet and you have a choice of fixed or variable interest rate agreements.

Key features and benefits of hire purchase

• Up to 100% finance of the purchase price can be agreed with the option to defer the VAT payment
• Option to buy the asset for a nominal fee at the end of the term
• Payment structure agreed at the outset for easy budgeting
• Repayments can be matched to your cash flow and the depreciation of the asset
• Unlike some bank loans, additional security is not usually required and a hire purchase agreement is not payable on demand if conditions are being met
• You can claim immediate capital allowances on the equipment
• The interest element of the payments is tax deductible
• VAT is immediately recoverable on the whole purchase price (except in the case of cars)