Need equipment for the long haul but want to keep costs flexible? A Finance Lease might be your perfect solution
A Finance Lease lets your business use valuable equipment without the commitment of ownership. You’ll make regular payments over a fixed term while the leasing company legally owns the asset. It’s ideal for businesses wanting predictable payments and tax efficiency without the responsibilities of ownership
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Once approved you will receive your funds the same day
Why tie up your valuable capital in depreciating assets? Finance Leases typically require minimal upfront costs - often just your first payment in advance. This frees up your cash reserves for other business priorities like marketing, hiring, or expanding your product line. It's about keeping your money working for you, not locked up in equipment that loses value over time.
Here's where Finance Leases really shine for your bottom line. Since you're essentially renting the equipment, your entire lease payment is typically tax-deductible as a business expense. Unlike hire purchase where only the interest and depreciation elements are deductible, every penny you pay on a Finance Lease can potentially reduce your tax bill. This makes financial planning simpler and often results in better tax efficiency.
Depending on the structure, Finance Leases can sometimes be arranged as operating leases for accounting purposes, keeping the asset off your balance sheet. This can improve key financial ratios like return on assets and debt-to-equity, potentially making your business look more attractive to other lenders or investors. It's a smart way to access equipment without adding significant liabilities to your accounts.
Finance Leases can be structured to match your cash flow patterns. Need lower payments during seasonal downturns? Want to align bigger payments with your busier months? We can arrange flexible payment schedules that work with your business rhythm, not against it. This tailored approach means you're never stretching your finances when times are tight.
Technology and equipment evolve rapidly - what's cutting-edge today might be outdated tomorrow. With a Finance Lease, you're not stuck with aging equipment. Many agreements include options to upgrade mid-term, letting you stay competitive with the latest tech without financial penalties or the hassle of selling old equipment. Stay ahead of your competition without the ownership headaches.
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Took the pressure off the company's quarterly cash flow and allowed them to continue delivering new and existing contracts. A national telecommunications company approached Business Finance House as they needed quick funding for a £200,000 VAT bill. We were able to arrange a same-day loan for the full amount that was repayable over 3 months. View Client Success Stories
Boosted cash flow and maintained operations A national materials wholesaler needed flexible working capital to manage short-term VAT obligations. With minimal security requirements, our lender provided a £250k 3-month facility, enabling the business to preserve cash flow and strategically manage HMRC payments without disrupting operations. View Client Success Stories
Maintained Cash Flow & Paid HMRC on Time A southern-based law practice had a hefty VAT bill that would have been a struggle to pay in one lump sum. They approached us requiring a 3-month VAT loan that would get the bill paid on time and not disrupt their cash flow. We were able to source a loan for the full amount within days and the lender did not require personal guarantees. View Client Success Stories
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A Finance Lease typically runs for most of the asset’s useful life, with payments covering the full cost of the equipment plus interest. Operating Leases are shorter-term and you’ll pay for only a portion of the asset’s value. With Finance Leases, you usually have options to purchase at the end, while Operating Leases generally assume you’ll return the equipment. Finance Leases also treat the asset as “on your books” for accounting purposes, while Operating Leases can sometimes be kept off the balance sheet.
With a Finance Lease, maintenance responsibility typically falls to you, the lessee. Unlike contract hire or some operating leases, maintenance isn’t usually included in your monthly payments. However, we can often arrange separate maintenance packages or help you include these costs in the lease if you prefer a single, predictable payment. Many businesses prefer this separation as it gives them control over who services their equipment.
You’ll typically have several options: you can pay a small fee (often called a ‘peppercorn rental’) to continue using the equipment at a greatly reduced rate; arrange for the equipment to be sold to a third party where you receive a portion of the sale proceeds (usually around 95%); or in some cases, purchase the equipment outright. We’ll explain all your options clearly before you sign any agreement.
Most businesses with a trading history of at least 6-12 months can qualify for a Finance Lease. Start-ups might need additional security or personal guarantees. The approval process focuses more on your business’s ability to make the payments rather than on the asset itself. This often makes Finance Leases more accessible than traditional loans, especially for growing businesses without extensive credit history.
Yes, but there are typically settlement fees involved. Since the leasing company has funded the full value of the asset, early termination usually requires you to pay the remaining lease payments, though often at a discounted rate. We always negotiate the most favorable early termination terms possible and will explain these clearly before you commit.
Almost any business asset with a resale value works well with Finance Leases: vehicles, manufacturing equipment, construction machinery, office fit-outs, catering equipment, agricultural machinery, and even some software packages when bundled with hardware. Assets with strong residual values often secure the best rates, as the leasing company has better security.
The tax efficiency comes from being able to deduct 100% of your lease payments as a business expense against taxable profits. This differs from purchasing, where you’re limited to capital allowances on depreciation and any interest on loans. However, tax rules can change, and individual circumstances vary, so we always recommend confirming the specific tax advantages with your accountant based on your business structure.
Finance Leases do appear on your credit file, but they’re often viewed more favorably than traditional debt because they’re secured against a specific asset. Additionally, since Finance Leases can sometimes be structured to stay off your balance sheet, they may have less impact on key financial ratios that other lenders examine. Many businesses strategically use leasing alongside other financing to optimize their overall financial position.
Absolutely! One of the advantages of Finance Leases is the ability to include these “soft costs” that don’t have residual value. Installation, delivery, initial training, software, and even some consulting costs can often be rolled into the lease agreement. This allows you to spread all project costs over the term rather than paying for these elements upfront, preserving your cash flow.
For established businesses with straightforward requirements, we can often secure approval within 24-48 hours, with funds released to the equipment supplier shortly after paperwork completion. More complex deals or higher values might take 3-5 days for full approval. We pride ourselves on keeping the process simple – typically just a one-page application for deals under £25,000, with minimal financial documentation required.
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Business Finance House Ltd is an independent Asset finance broker not a lender, as such we can introduce you to a wide range of finance providers depending on your requirements and circumstances. We are not independent financial advisors and so are unable to provide you with independent financial advice.
Business Finance House Ltd will receive payment(s) or other benefit from the finance provider if you decide to enter into an agreement with them. Business Finance House Ltd is an appointed representative of AFS Compliance Ltd which is authorised and regulated by the Financial Conduct Authority under number 625035.
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