Hire Purchase

  • Tailored deposit & repayment plan
  • Typically available for hard assets
  • Claim capital allowances
  • Potential tax advantages
£
Excellent 300+ reviews 4.6 stars 200+ reviews
 

Hire Purchase

  • Tailored deposit & repayment plan
  • Typically available for hard assets
  • Claim capital allowances
  • Potential tax advantages
Excellent 300+ reviews 4.6 stars 200+ reviews
  • Both a lender and broker

  • Nearly £1bn financed since 2007

  • Expert personal service

Portman Hire Purchase

Choose a term and deposit to suit you

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What does Hire Purchase mean?

Hire purchase involves a business acquiring new equipment, machinery or vehicles by making an initial deposit and paying or financing the VAT up front. Fixed monthly repayments are then made, the value of which is affected by whether the customer pays off the entire loan over the term or has chosen a final balloon payment. This contrasts with an equipment lease, where the VAT is spread across monthly payments. There is a final nominal option to purchase fee transferring ownership of the asset to the customer. 

Hire purchase is best suited for situations where a company definitely wants to own the item at the end of the term, often where the asset has a significant usable lifespan, a high residual value and will not need to be upgraded.  

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How does Hire Purchase work?

When a business requires new equipment or vehicles, they work out what’s needed and where they want to buy it from. They then contact an account manager at Portman to discuss their finance options, monthly payments and the payment structures available to them. The most appropriate deal for the customer is secured, the deposit and repayment structure are confirmed, and a financial agreement is formally accepted.

The customer selects the asset, which the lender buys and agrees to sell to the customer on credit. The customer must usually pay the VAT upfront and a deposit. The customer then makes fixed monthly payments over an agreed period including interest. Customers will own the item outright at the end of the term once the contractual payments are made, by paying a nominal final option to purchase fee. As both a lender and a broker, either Portman or one of our panel of lenders will buy the item, which will be delivered directly to you from the supplier.

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What happens at the end of the agreement?

During the period of the agreement the asset is owned by the lender. Once the term is complete, the business has a guaranteed option to own the asset either through a nominal option to purchase fee or a balloon payment, depending which option was chosen at the outset.

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Are Hire Purchase payments tax deductible?

As hire purchase involves ultimate ownership of the asset, the entire lease rental payments cannot currently be offset against company profits. However, some capital allowances can be claimed. It may be possible to deduct the interest element of the payment from the company P&L and depreciate the capital value of the asset. We do recommend that you seek professional tax advice.

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How much does Hire Purchase cost?

Hire purchase interest rates vary because the credit history, business performance and the type of asset being purchased all affect the rate. As both a lender and a broker, Portman will explore the market on your behalf and choose the lenders that most closely match your needs.

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Why would I use Hire Purchase?

  • Get what you need now
  • Preserve existing credit lines
  • Structure the deposit and repayments to suit your monthly budget
  • Avoid price inflation 
  • Potential tax advantages
  • Preserve cashflow for operational cost and contingency
  • Capture opportunities immediately
  • Secure fixed competitive rates
  • Useful for expensive assets that will likely retain value
  • Protect your personal wealth

Hire Purchase FAQs

Finance that gives you a guaranteed option of ownership in exchange for usually paying an initial deposit and the VAT upfront.

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

With a hire purchase agreement, the borrower typically pays the VAT and a deposit upfront. With lease finance there is usually no deposit, and the VAT is spread across each payment.  

The tax treatment is different between hire purchase and finance lease. We recommend taking professional tax advice to determine which is best for your business.

With hire purchase, the borrower has a guaranteed right to buy the title of the asset, which will normally be for a nominal administration fee. At the end of a lease finance agreement, the borrower can give the assets back or continue leasing. However, purchase of the asset on a finance lease can usually be arranged for a fee.

What happens at the end of a hire purchase agreement?

At the end of a hire purchase agreement, the borrower has a guaranteed right to purchase the title, i.e. own, the asset for which there may be a nominal administration fee.

Fulfill a contract Cover a one-off purchase Business growth Stock and equipment
How does it work?

We make things easy

We know that finance can sometimes be confusing and stressful, but what we do is simple.

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1. Get started in 1 minute.

Enquire without affecting your credit score.

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2. Understanding your business.

A dedicated account manager will discuss your needs and collect documentation.

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3. Our experts do the leg-work.

We find the right deals, complete applications on your behalf and get you a no obligation quote.

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4. Your no-fuss finance is funded.

If accepted, your assets will be bought and delivered or the finance released to your account.

Enquire today
Our experts can find the right funding for you.
Find out how we can help today.
OUR TRACK RECORD

A professional, personal service every time

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Excellent service

Excellent communication and help throughout the process. Easy and prompt emails. Highly…

Daniel Cooper
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Knowledgeable Team

Portman and the entire team are great to work with, know their lenders and products incredibly…

Marney Howe
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Very smooth operation

I have now dealt few times with Portman Finance and it has always been very smooth and…

Anthony ienco
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Outstanding Service!!

We used Portman Finance to secure finance for a new restaurant we are opening. Jack Weston…

David B

Excellent / 300+ reviews

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