Why would you use leasing to purchase catering equipment?
What is the difference between a bank loan and leasing, and can it be used for say, catering equipment?
Asset finance is where the ownership of the item passes to the leasing company. The user of the equipment will then pay a rental fee for use of the item. There is usually a deposit to be paid too, but this is dependent on the length of the lease contract itself.
Finance payments are 100% tax deductible. Asset finance is the most tax efficient way of acquiring new equipment, and businesses of all sizes use it to great effect. This type of finance is usually thought of being used by companies or individuals who can’t afford to buy, but this is definitely not the case.
On the contrary, asset finance is designed for profitable businesses to reduce tax liabilities. It also eliminates the need to worry about resale values. Usually there is a minimum of around £1,000 + VAT to consider, but no maximum.
Here is an example of a cooking oil filter machine which can be leased.
The loan is subject to customer credit status. The county of use is also very important for the leasing company. UK providers expect end users to be based here.
Regarding the length of terms, any period between 1 and 10 years can be considered. This is a massive advantage for businesses looking for flexibility and those wanting to boost cash flow.
Almost anything can be purchased using these types of arrangements: from catering equipment supplies to vehicles. In fact, any item for business use including fixtures and fittings, software and lighting. The scope is massive.
One downside is that lenders can only usually deal with established companies – startups are difficult to help.
Can I include delivery and installation costs in my finance? Definitely. You can even choose seasonal payment terms if your business is this way inclined. Great for holiday businesses that only get traffic coming through during peak holiday periods.
So, if you are looking to finance anything for your business, make sure that you investigate leasing as an option. It will assist with cash flow, be lower in monthly payments, and is extremely flexible. Ideal for anyone who is unsure of in this financial climate.