What is Leasing?
Leasing is a financial contract between you, the customer, and a leasing company.
You will be committed to repay a given number of fixed rentals for the term of the contract. If the equipment fails to work you must not stop paying the rentals as this breaks your contract with the leasing company. You must advise the leasing company at once and ask them to resolve the problem.
How often do I pay?
You pay monthly or quarterly over a set time by direct debit.
What items are suitable for leasing?
Most items of equipment in normal use within the business environment may be obtained through leasing.
Some typical items are listed below.
- Plant and machinery
- Business cars
- Commercial vehicles
- Agricultural equipment
- Hotel equipment
- Medical and dental supplies
- Computers, including software packages
- Office equipment
What are the advantages of leasing?
- Immediate use of the equipment without paying the full cost price therefore assisting cash flow.
- Leasing is entirely separate from any bank lending or other credit arrangements you may have and by leasing equipment your overdraft or bank loans are free to use in the running of your business.
- Because you lease costs are fixed for the duration of the agreement, you can include each years rentals in you annual budget and remove any guesswork.
- You will be able to offset all the lease rentals that you pay in any year against your taxable profits for that year. Therefore you get full tax relief on any leased equipment and this should reduce your tax bill.