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Tracy Spence
Tracy Spence
Tracy Spence's Blog

How Does Lease Financing Work?

With Asset Funder, you can easily afford to gain access to new business equipment via our cost-effective lease financing. When taking on a lease, you will be able to immediately access your new asset and pay for it over a specified number of monthly payments. As the payments add up, eventually you will meet the full cost of the asset, plus interest.

At this point you will have to choose what to do next. Depending on the asset you have leased, it may be reaching the end of it's useful life, or it could remain useful for some time to come. So, at this point you could either choose to return the asset to the lessor and look at taking out a new lease on the latest model, or continue to use it and negotiate a secondary leasing period. Should you choose the latter, then you can often negotiate cheaper lease payments due to the age or condition of the asset.

How is this different from hire purchase?

Choosing between hire purchase or lease financing with Asset Funder can come down to your financing and accounting choices. You may find that with hire purchase you need to pay VAT charges up front, which can put a serious dent in your cash reserves. However, through lease financing, you can easily spread your VAT costs over your monthly payments.

It also depends on how you want to have your asset recorded. If you wanted to show your asset as a business operating cost, then offset the rental cost against profits, then lease financing is the better option.

For more information about our flexible lease funding options, feel free to contact one of our friendly customer service team members today. We are here to help!


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