From agricultural equipment and power tools to manufacturing machinery and office telephony systems, upgrading core business equipment is a necessary, but expensive, task.
SMEs can often find themselves in the difficult position of being unable to make much needed equipment upgrades due to a lack of spare capital. In turn, this can severely inhibit growth and lead to missed business opportunities further down the line, as well as potentially affecting the safety of your workplace.
Fortunately, there are numerous financing options available which alleviate the pressures of having to make large upfront payments, the most common of which is a hire purchase. Read on to learn more about how hire purchase agreements can help your business to access essential equipment upgrades without the inconvenience of large, upfront costs.
WHAT IS A HIRE PURCHASE?
Hire purchase (HP) agreements allow businesses to spread the cost of new equipment purchases over a pre-agreed number of months or years. The lender purchases the equipment on your behalf and this money is then repaid with interest each month.
You'll have full use of the equipment whilst you're making your repayments and, at the end of the hire purchase agreement, you'll own the asset outright.
Upgrading plant, manufacturing, agricultural, transport and construction equipment can be incredibly costly. However, a hire purchase will only require your business to put down a small deposit at the start of the agreement with the rest paid in monthly instalments, typically over 1-5 years.
You'll usually need to provide some initial information regarding the seller, as well as details of the make, model and cost of the equipment you wish to buy. Once approved, the lender will pay your seller directly, securing the loan against the upgraded equipment and giving you full, unrestricted access to the asset straight away.
WHAT OTHER BENEFITS ARE THERE TO USING HIRE PURCHASE?
Aside from being able to upgrade equipment without the burden of a hefty initial outlay, HP agreements can provide a number of additional financial benefits to your business.
VAT is usually paid up front as part of your deposit, meaning that any subsequent repayments are made without this cost included. You'll also be able to offset any interest payments against taxable profits as well as seeing the asset appear immediately on your business balance sheet.
Choosing the right hire purchase agreement can help to significantly reduce the overall amount that you'll repay.
At Capitalise, we've brought together a range of HP products from more than 70 trusted lenders and our intuitive online platform will help to match your business with a finance partner that specialises within your industry.
Your Capitalise profile takes just a few short minutes to set up and, once created, you'll be able to easily apply to multiple lenders with the click of a button. You can even add accountants and other business partners onto your profile and they'll be able to upload documentation and additional information which you don't have immediately to hand.
Once your chosen lenders have underwritten your HP agreement, you'll receive no-obligation offer letters online and will be able to select an option that you feel is best suited to your business needs.
So what are you waiting for? Begin the process of upgrading your essential business equipment today or register with Capitalise to receive more information on how hire purchase can help your business to grow by clicking on the sign up button below.