Here are some of the financing options you might want to consider and a brief description of how they work.

Hire purchase and Lease purchase

• Hire purchase, also sometimes known as lease purchase, is a popular choice that gives you ultimate ownership of the asset through payment by regular installments.
• Payments can be structured to fit with your cash flow needs. For example, regular payments can be reduced by including a final lump sum (sometimes known as a balloon payment)
• This reflects the assumed value of the asset at the end of the agreement. Your business can claim the available capital allowances and offset the interest charges against trading profit.

Finance Lease

• Finance Leasing allows you to rent the asset rather than buy it.
• Normally, rentals will be calculated over an agreed term, at the end of which will have recovered its outlay in purchasing the asset on your behalf.
• While you can never own the asset yourself, you will normally be allowed to benefit form the majority of the sales proceeds at the end of the term.
• The rentals can be offset against your profits.

Operating Lease

• An Operating lease is particularly effective for high value, specialized equipment or for assets needed to support a specific contract.
• Rentals will be based on the value of the asset over the period you require it and as a result can be linked directly to the revenue the asset generates.
• Unlike a finance lease, rentals will not cover the full cost of the asset but protects you from the risk by guaranteeing a residual value at the end of the term.
• You can generally deduct the full cost of the lease rentals from profits ad asset wont appear on your balance sheet.