Top Tips on Finance Lease for Business
Leasing has been a popular option for businesses for several years and the idea of renting rather than buying has some unique advantages.
Read our top tips for leasing to find out why Finance Leasing might be a good option for your business.
Tip 1 – Cash-flow
Finance Lease agreements usually require a smaller cash outlay than Hire Purchase agreements. The initial payment is often less, from one month to three months in advance, and VAT is only payable on the rentals as they are charged rather than on the total cost of the machine. So for businesses where cash is tight Finance Leasing offers an attractive option.
Tip 2 – Taxation
Finance Leases are calculated on the VAT exclusive cost of a machine but VAT is charged on the rentals as they fall due. This is then fully recoverable in the usual way, making it a VAT efficient option.
From a Corporation Tax perspective, machinery leases are 100% tax allowable but unlike the tax break currently offered by Hire Purchase, the tax saving is made evenly over the period of the lease rather than in the financial year when the machinery was acquired.
New and recently established businesses which are loss making or only just breaking even are less likely to be concerned about accelerated tax allowances and more concerned about cash flow – see Tip 1.
Tip 3 – Ownership
Used Machinery financed on a Lease remains the property of the underwriter and must be sold to an unconnected third party at the end of the agreement. In some cases the machine can be sold then title transferred to your business but it’s worth bearing in mind that you might have to keep leasing on an informal run-on basis until you sell the machine.
More about Finance Lease
TeleLease provides Finance Leasing for established businesses, SMEs, new businesses, franchises & franchisees.
We offer Finance Lease on a wide range of used machinery and equipment including Lathes, CNC, Woodworking Machinery, Metal working machinery, Machine tools, Production plant and more.
Finance Lease is a great Leasing solution if you need to keep your cash-flow under tight control but like the idea of taking the risk and reward associated with ownership.
Rentals are usually based upon anticipated depreciation and VAT is payable on the rentals rather than the cost of the goods. Taking both of these factors into account cash outlay can usually be reduced by comparison with Outright Purchase or Hire Purchase.
For qualifying goods Finance Lease rentals are 100% tax allowable and VAT is fully recoverable.
Get a Quote Today
The process is easy and you will have your Equipment Leasing quotation in no time at all.
Either phone us today on 03300 580 151 or complete the call back request and we will call you.