Lease Purchase (No Deposit Hire Purchase)
Our asset finance service allows any business or commercial organisation to obtain the use of a capital asset without the cost coming out of the bank account at day 1. Frequently the asset will be able to pay for itself by earning profits or reducing costs so that the effect on your cash flow is actually positive rather than negative.
Different types of agreement are available to suit the different types of asset you may want to acquire and the way you want to schedule the payments.
A lease purchase agreement is effectively a hire purchase arrangement, normally set up with a small or no deposit. Like a finance lease, it is a means of financial acquisition rather than use alone, and its practical effect, legal documentation and accounting treatment are virtually identical.
However, lease purchase differs from a finance lease in that it includes an option for the lessee to purchase the equipment at the end of the primary term for a one-off payment.
Therefore it is the lessee rather than the lessor who is entitled to claim capital allowances on the equipment in question, making these agreements less attractive to the lessor unless rates are higher.