How can an enterprise grow to its full potential despite the costs? A finance lease provides the solution for many modern businesses.
A finance lease is a method of funding business assets. Finance leasing has continued to increase in popularity, especially amongst businesses looking to procure the latest technology or equipment in an affordable way.
Also known as a capital lease, a finance lease involves the customer essentially renting an asset for a set period of time. A finance lease is typically a full pay-out agreement; this means that the sum of the rentals includes the full capital cost of the equipment, plus the interest accrued. A finance lease allows for the payments to be spread over the lease term, while also providing flexibility at the end of the contract.
When a customer signs up to a finance lease, they commit to a primary rental period within which monthly payments are made to cover the full cost of the assets, with interest added on top.
Once the primary period is up, you will usually have three options to choose from when it comes to deciding whether or not to end the lease period. These include:
The main difference between hire purchase and a finance lease is, at the end of a finance lease you return the asset whereas, at the end of a hire purchase, you have the option to purchase and keep the asset if you wish.
Finally, if you’re thinking about signing up to a finance lease, you must be aware that the lease period is likely to be for the period in which the asset operates without failing. (i.e. in the example of laptops & desktop PC's this is likely to be between 36 - 60 months). With this in mind, choosing a finance lease is a long-term commitment.
If you’re interested in signing up to a finance lease and would like to maximise the potential of your business, get in touch today.
Here at CHG-MERIDIAN, we ensure our clients are always one step ahead, with equipment harmonisation and tailored plans that work for them. Contact our team today.