Published by AMTEC on 03rd Aug 2021

Choosing the right finance option for your machinery

Helping you choose your financial options

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Financing your equipment is a great way to get the full use of your goods without having to pay the full amount upfront. This can help you generate a return in a much shorter time frame then purchasing the goods outright. It gives your business the extra cushion to help protect your cash flow, whether you need to hold some money back for an upcoming project or if you just want to keep some money safe in the bank for any future expenses.  Financing your goods may be more costly overall than purchasing outright but it does come with a lot of advantages also. The two main products to consider when financing your assets are Hire Purchase and Finance Lease often referred to as a HP or a FL. Below, we have listed some key features to help you decide what product would be most suited for your needs.  If you have any questions or would like some clarification on the finance products available, please feel free to get in touch.  

Hire Purchase (HP)

·         Full ownership of the goods at the end of the agreement.

·         VAT is typically paid with the deposit but possible to have up to a 3-month VAT deferral

·         Flexible payments which can be tailored to suit your seasonal income

·         Goods are HPI checked.

·         Possible balloons at the end of the agreement (if required)

·         Hire Purchase gives you the same Capital allowances as purchasing outright

·         Small deposit starting from little as one-month payment

·         Documentation fee & Options to purchase fee required (Will not total more than £200.00)

·         Terms available 13-84 Months

·         Regulated HP can allow you to pay up to £8,000.00 within a 12-month period directly off your capital

·         Fixed Term throughout the agreement.

·         Agreement can be settled at any time throughout the agreement.

·         Interest element included within a payment can be registered as a business expense

·      Provides a hedge against inflation

Finance Lease (FL)

·         Fixed Term throughout the Agreement

·         Unlike HP, VAT is paid on top of each rental instead of part of the deposit

·         Title of the goods does not pass automatically at the end of the agreement but you are entitled to up to 100% of the sale proceeds

·         Can be beneficial if you are not VAT registered as the finance company can claim some VAT on your behalf when selling the goods

·         Documentation fee and Secondary period rentals once primary rental has finished.

·         Flexible payments which can be tailored to suit your income

·         Possible balloons at the end if required.

·         Small deposit starting from little as one month payment

·         Term available 13-84 months

·         Repayments counts towards your business expense

·         Provides a hedge against inflation

·      If you aren’t VAT registered when starting your agreement but become so during the term, you are able to start claiming the VAT on each payment once you become registered.

At AMTEC we're finding more and more farmers making use of the benefits of machinery finance.  To discuss how you can finance your next machine contact Business Finance Brokers on the below details.

Adam Ayres – 07876 889779

Kevin Ayres – 07831 789 238

Office – 01455 635 677


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