Business Lease Broker > Finance Lease

Plant & Machinery Lease

Fincred CF is a broker that can help you lease plant and machinery equipment for your business. 

What is this lease and how can it benefit you? Read on for more information.

What Is A Plant Lease or Machinery Lease 

Businesses in the manufacturing industry, waste and recycling industry, construction industry and many others, require the use of large and powerful industrial equipment. This equipment is expensive and to buy them outright is not financially feasible for many small and medium-sized businesses. Leasing may be the solution for your business to gain control of expensive assets without the large upfront cost and allow your company to grow.

Leasing contracts can be used to acquire many types of business equipment and is an effective alternative to equipment finance (where you enter into a finance contract to purchase the equipment). 

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. There might be an option for you to lease new, upgraded equipment instead of purchasing it. As an alternative, you may be able to purchase the equipment by making a final payment, or return the asset and take a majority percentage of the sale proceeds from a third party.

Specialised leasing companies, banks, and equipment dealerships offer plant and machinery leasing. 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 types of equipment you want to upgrade more regularly. You can find out more about operating leases here.

Finance leases are for longer periods of time (potentially for 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. 

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 Leasing On Plant Equipment or Machinery Beneficial For My Business? 

Whether it is vehicles, office equipment, machinery, or anything else, leasing offers a very cost-effective way to gain the use of equipment. A substantial deposit is often not required. Instead, the equipment is leased for a monthly fee. 

Having to pay a large sum in the beginning can have a significant impact on your company’s cash flow. Since most small and medium businesses cannot afford this upfront payment, and even some large companies prefer not to, leasing is convenient for both.

Renting can be scaled based on the needs of your business. Equipment can be upgraded if it is necessary. You can upgrade to higher-level equipment, without having to sell your existing machinery and look for replacements, if you need to handle a higher work volume.

 

How Much Does It Cost?

The interest rate on your lease will be calculated based on variables including your company’s risk profile, economic conditions, the asset, and the leasing period. 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 us fully understanding your leasing requirements.

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? 

As with equipment leases, 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 lessor 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, VAT can be reclaimed, and interest repayments offset against profit.

Find Your Leasing Solution With Fincred Cf 

It can be difficult to know which asset leasing option is right for your business. At the end of the contract, do you want to outright purchase the equipment, or would you prefer to start a new lease term? 

FinCred CF is a specialist broker in the area of asset leasing (and finance), and we are able to answer your questions and walk you through the process.

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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