Hire Purchase


Hire Purchase is a way to buy assets and keep your capital as cash. The finance is secured on the asset and gives you ownership/title on completion. Hire purchase is a tax efficient way to buy an asset as capital allowances can be claimed immediately and interest is also tax deductable. VAT can be reclaimed in full at the outset of the transaction.


 

Finance Lease


With a finance lease the finance company retains ownership of the assets. However you can sell the asset at the end of the term on behalf of the finance company, keeping most if not all of the proceeds. VAT is not payable in full at inception but is added to each rental/payment which in turn can be charged against taxable profits. This type of funding is off balance sheet.


 

Operating Lease


An operating lease allows you to benefit from the use of an asset with the finance company taking the risk on any residual value. This has the benefit of keeping the rentals lower than a normal finance lease. Essentially you are renting the asset from the finance company. At the end of the agreement you return the asset with nothing more to pay. As with the finance lease the rental/payments which also attract VAT can be offset against.


 

Contract Hire


Contract Hire is the same as an operating lease, with a maintenance package for the asset attached. The main benefit of this type of funding is that you have fixed running costs, which makes budgeting easier, Payments/rentals also attract VAT. This product is also off balance sheet.


 

Sale and HP/Lease Back


This is retrospective funding of an asset you have already bought. Perhaps in hindsight you have financed the asset rather than pay cash. We can arrange funding on such a purchase, normally up to 30 days after the date of you purchase invoice.

City & Shire Asset Finance

Greengates

Banff Road

Turriff

Aberdeenshire

AB53 5TA

Douglas Shand

07971212115

douglas@cityandshire.co.uk

Graham Fraser

07802688431

graham@cityandshire.co.uk