Business Asset Finance: Hire Purchase

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What is business hire purchase?

Business hire purchase, also known as business HP, is a type of financing for businesses that allows a firm to possess and control an asset before it is paid for in full.

How does it work?

The business will enter a contract where a deposit and instalments will be agreed, over a period of time until the asset has been paid for in full. The business will then get to use the asset during the time of the contract. At the end of the contract, the asset will then be transferred into the businesses' ownership.

  • Contract agreed
  • Business gains control of asset without ownership
  • All instalments paid
  • Ownership transferred to business

Which industries might business HP benefit?

Every industry can use and benefit from business hire purchase, it is commonly used in industries where expensive machinery is required such as construction, manufacturing, transport and engineering but can also be used for smaller items such as computer and office equipment, mobile phones and cars.

Business HP is a solution for any business requiring an asset straight away but not wishing to pay the full value immediately, as long as the business is able to leave a deposit and pay the remainder of the balance and interest in instalments

  • Construction
  • Manufacturing
  • Transportation
  • Engineering
  • Healthcare
  • Professional services
  • Printing
  • Plant Hire

What can be Business HP be used for?

Business HP can usually be used to purchase any sizable assets for your business. This includes equipment, machinery and vehicles. Some examples of how business hire purchase can help support the investment of equipment in different sectors are:

Construction
Construction vehicles, vehicle maintenance equipment, construction technology & software

Manufacturing
Manufacturing machinery, support equipment such as cranes and robotics, technical equipment

Transport
Vehicles (road, rail, water or air), containers and storage, tracking technologies and equipment

Engineering
Vehicles, engineering machinery, technologies and office equipment

Healthcare
Office and technical equipment, vehicles, medical equipment

Pros and Cons

  • Business gain control of assets without significant drain of day-to-day income
  • Use of asset may increase business turnover, so paying back is easier
  • Fixed-rate funding making budgeting hire purchase easy
  • Total sum of payments for hire purchase is higher than the full payment of asset purchase
  • Costs can be incurred for admin, if required, such as change of asset address
  • If asset is no longer required, you may incur early termination fees.

How do I apply for business hire purchase?

Applying for hire purchase is easy and there are a number of revenues you can take to access this financing agreement. You can contact a finance provider, or hire purchase provider and speak to them about the asset your business requires or head to the supplier or manufacturer of the asset directly for support.

Usually it is quite a straight forward process and does not require excessive information, although you are likely to be asked to provide evidence that you are capable of meeting the instalments and that your business credit score is in a good position.

What do I need before applying for business hire purchase?

It is always best to be prepared, typically you will be asked for the following prior to completion of your business hire purchase contract.

  • Information on company turn over
  • Your business credit score in a good position
  • Deposit (often around 10% of asset value)
  • Information on the asset required
  • Evidence of capability to meet instalments
  • Typically, to be trading for at least 2 years prior to application

Hire Purchase for small businesses

Hire purchase financing is a great option for small businesses that have a strategy in place for business growth. It helps to support SME’s with purchasing the assets they require for growth, whether it is machinery to improve daily ops and increase productivity or the vehicles to improve logistics and save money in the long term on loaning without ever possessing the equipment that is vital to your business.

Applying for hire purchase is easy and there are a number of revenues you can take to access this financing agreement. You can contact a finance provider, or hire purchase provider and speak to them about the asset your business requires or head to the supplier or manufacturer of the asset directly for support.

Usually it is quite a straight forward process and does not require excessive information, although you are likely to be asked to provide evidence that you are capable of meeting the instalments and that your business credit score is in a good position.

Call 03451 303030 and let's talk options.

OR Request a callback. We can help you secure assets from £7.5k up to £500k.

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