Equipment Lease

Fincred CF is a broker that can find a lease for equipment you need for your business.

What is an equipment lease and how can it help you? Find out the answers below.

What Is An Equipment Lease?

An equipment lease allows you to rent equipment for your business in exchange for a fee that is usually paid monthly. It is a form of asset finance.

Leasing is an alternative way to acquire equipment than equipment finance (which involves entering into a finance agreement to purchase the equipment).

Leasing can be used to acquire the use of many different types of equipment, including company vehicles.

At the end of the leasing term, a number of things could happen, depending on the terms of the contract. You may be able to continue leasing the same equipment. You might have the option to receive new, upgraded equipment and lease them instead for a new set period. Alternatively, you may have the option to purchase the equipment with a final payment. In  allof these cases, the price may be the same or higher.

Equipment leases are offered by specialist leasing companies, banks, and equipment dealerships. Brokers like FinCred CF can help you find the best leasing solution for you from the many options on the market. 

Different types of leases include different terms. You may want to take advice to better understand which of these products are best suited for your situation: 

Operating leases are suitable for shorter periods of time which makes them a good option for short term projects or for equipment you want to upgrade more regularly. You can find out more about operating leases here.

Finance leases are for long periods of time (potentially for the most of the useful life of the equipment), and usually give your business the option to purchase the equipment at the end of the lease period. You can find out more about finance leasing here

Hire purchase arrangements look very similar to other leases but are designed to transfer  ownership of the asset to your company at the end of the agreed period. You can find out more about hire purchase for commercial vehicles here

Why Is An Equipment Lease Beneficial For My Business?

Leasing offers a very cost-effective way to make use of equipment, whether it is vehicles, office equipment, machinery, or anything else. Many leases don’t require a significant down payment. Rather, they are paid for through small monthly payments. 

This is far better for your business cash flow than having to pay a large sum at the start. Most small businesses would not be able to afford this upfront payment, and even large businesses would prefer not to, so leasing is equally beneficial for both.

Leasing is easy to scale, based on the evolving needs of your business. You can upgrade your equipment if you need to. If you need to upgrade to more advanced equipment to handle a higher work volume, you can do so without selling your existing machinery and shopping for replacements.

How Much Does It Cost?

The interest rate on your lease will be calculated based on risk. The number of variables are vast, and as no two businesses are the same it is impossible to say what rate you could be offered without knowing your personal information and business situation. 

Large, stable businesses with excellent credit ratings and a low-risk profile might be offered an interest rate starting from 2.5% Flat Rate and increasing according to factors such as company credit history and risk, and the asset itself.

How Does An Equipment Lease Affect My Accounts?

It depends on the type of lease. 

A finance (long-term) lease goes on your balance sheet as a fixed asset and as monthly payments are made to the leaser they are deducted from the lease liability account. 

For an operating (short-term) lease, each monthly payment is simply recorded as an expense. 

Leasing can be a tax effective way to make use of an asset as it can be accounted for as an operating cost and therefore be deductible from taxable profits.

Find Your Leasing Solution With Fincred CF

It can be difficult to know which asset leasing option is right for your business. Do you want to outright purchase the equipment at the end of the agreement? 

As an experienced broker in the area of asset leasing (and finance), FinCred CF will help guide you through the process and answer any questions you may have.

Leasing equipment doesn’t have to be difficult. Find out what we can do for you today by getting in touch.

We work in partnership with our sister company FinCred IS, an expert in surety bonding and trade credit insurance. Which are able to offer policies which can complement and facilitate your asset lease agreement.

UK Wide Industry Statistics

Total value off all sales financed in the UK - £bn

Domestic invoice discounting - £bn

Total number of asset based lending clients

Domestic invoice discounting clients

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