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Equipment Finance Product Options for Your Business Customers:

Our equipment finance covers a full range of specialist financial products that fit your customers’ individual business needs. Talk to our expert team to discuss which product is right for your industry sector, equipment types and customer requirements, obligation free.

Operating Lease / Rental:


If your customers wish to procure vital assets from you for their business without making a significant upfront capital commitment, an operating lease is a great option. 

An operating lease is a very easy and simple arrangement. Your customers pay an agreed flat monthly rental plus VAT for an agreed number of months and have exclusive use of the asset during the fixed term. They simply return the asset at the end of the agreed fixed term and have no residual liability at handover. 

Benefits and Operating Lease

Operating leases can be structured to bring customized benefits to your customers.  A feature of these fixed rental arrangements is that the calculation of the monthly rental considers the fact that the asset will have a pre-determined resale value at the end of the fixed term. Accordingly, this results in the fixed monthly rental being a lower amount for your customer for the entire fixed term.   One of the main advantages is that the customer will have lower rentals as the finance provider assumes a resale value at the end of the contract.

An Operating Lease is not recorded on the lessee’s balance sheet. The risk of ownership rests with the lessor, with the lessee accordingly enjoying the benefits of using the asset without the responsibility of ownership.  An Operating Lease is essentially a pure rental arrangement that is recorded in the lessee’s books as a business expense deductible from pre-tax profits.

An operating lease can also include added optional benefits such as installation and maintenance.

As a supplier, you have a strong link with the customer during the lease initial fixed term and, you have a strategic advantage to make a new sale at the end of the fixed term, when the customer contractually returns the asset.


A Finance Lease is an agreement covering most of the working lifespan of a business asset.

Like an Operating Lease/Rental, a Finance Lease is geared to accommodate longer life assets.  A Finance Lease gives businesses exclusive use of the asset for a longer fixed term in return for a regular rental amount. Effectively a leasing company (the lessor) buys the asset from a supplier and rents it to a hirer (the lessee) for an agreed period. At the end of the hire period, the asset should be returned to the leasing company. Depending on the structure, when the equipment or vehicle is sold, the hirer can receive a rebate depending upon the sale price. Typical rental periods are between two and five years.

Finance Lease

Benefits of a Finance Lease

Essentially, this leasing agreement gives your customers access to business equipment at an affordable rental price that can be offset against their taxable profits. The asset repayments count as a business expense and are fully tax allowable. VAT registered companies can claim back any VAT included within the rental payments.

Also, maintenance costs can be included in the rental which can be a hedge against possible unforeseen expense repairs and downtime. 

An Operating Lease is a tax efficient agreement that allows for accurate budgeting with minimal risk. It is essentially a pure rental arrangement that is recorded in the lessee’s books as a business expense deductible from pre-tax profits.


Hire purchase works simply: the customer usually pays the full VAT in advance with monthly hire payments determined over an agreed fixed period. At the expiration of the agreement, the customer takes full ownership of the asset. Hire Purchase agreements can also be structured with an upfront deposit and/or a residual balloon amount to bring about a reduced fixed monthly rental.

All of the benefits, rights and risks of economic ownership rest with the customer under this arrangement.

Commercial Hire Purchase

Considerations between a Finance Lease and or Hire Purchase

When considering the options of choosing between a hire purchase and a Finance Lease, it is mostly about balance sheet considerations, accounting and the different timing treatment for VAT.

Under Hire Purchase, VAT is usually payable up front, whereas with a Finance Lease the VAT is effectively payable as an add-on to each monthly lease rental, thereby spreading the VAT evenly over the entire fixed lease term.

Also, there are balance sheet considerations and companies may choose Hire Purchase because under this arrangement, the goods will be recorded as an on-balance sheet asset.

Alternatively, some companies will choose to keep the asset off balance sheet and will therefore prefer a Finance Lease so that they can characterize the asset as an operating expense with the rentals  deductible for tax purposes against pre-tax profits.

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