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What is a finance lease?

How the finance lease powers the modern business

How can an enterprise grow to its full potential despite the costs? A finance lease provides the solution for many modern businesses.

What is a finance lease?

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.

How do finance leases work?

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.

What happens when the finance lease is up?

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:

  • Returning the asset to the lessor while upgrading to the latest technology
  • Continuing to use the asset in a secondary lease period 
  • Ownership options may be available once the lease has been terminated, at the end of the minimum period

What’s the difference between a finance lease and hire purchase?

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.

Let CHG-Meridian help

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.

Contact us!

We'd love to hear from you, feel free to contact us with any questions.

Simon Young

Vice President Sales UK/Ireland

  • Head Office Egham CHG-MERIDIAN UK Limited
  • Barons Court 22 The Avenue
  • TW20 9AB Egham, Surrey
  • +44 1784 470701
  • 07546 524690

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