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Finance Lease for Business

At Charles & Dean, we understand the need for flexible funding solutions to acquire essential assets without tying up valuable capital. Finance Leasing allows businesses to use commercial equipment, vehicles, machinery, and more, without the financial responsibility of ownership.

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What is Business Finance Lease?

Understanding Finance Lease

A Finance Lease is a long-term lease for business assets. Instead of buying the asset upfront, you pay ‘Rentals’ over a flexible rental period. Unlike Hire Purchase, a Finance Lease does not provide eventual ownership, allowing you to manage your cash flow with fixed monthly repayments without the commitment of owning the asset.

Initial Rentals: Your First Step Forward

The lease begins with an initial rental, typically equivalent to 1–6 months’ payments upfront. This reduces the remaining balance and helps structure payments to suit your business.

Fixed Payments: Budget with Confidence

Make predictable, fixed monthly payments over an agreed term, helping your business manage costs effectively while keeping essential equipment in operation.

End-of-Term Options: Flexibility for Your Business

At the lease’s end, you can sell the asset for the lender, possibly sharing the proceeds, or continue using it with a low-cost 'peppercorn rental' to retain affordable access.

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Product Suitability

Is Finance Lease Suitable for Your Business?

Business Finance Lease enables you to acquire vehicles, machinery, and equipment without large upfront costs. You make fixed monthly payments, paying VAT only on the rentals, not the full asset value. In some cases, rental costs may be offset against taxable profits.

Like any finance option, there are benefits and considerations. Here's a breakdown to help you decide:

Benefits of Finance Lease

Reduced Upfront Costs Finance leasing allows businesses to acquire essential assets without a large initial investment, preserving capital for growth opportunities.

Immediate Asset Use Start using the asset right away to boost operations and revenue from day one, without waiting for full purchase payments.

Flexible Payment Terms Finance leases offer fixed monthly payments for better budgeting and cash flow management. Flexible terms let you tailor the lease to your business needs.

Tax Benefits Lease payments may be considered operating expenses, potentially offering tax advantages. Consult your tax advisor to see how these apply to your business.

Drawbacks of Finance Lease

Higher Overall Cost Over the lease term, the total cost of financing an asset can exceed its outright purchase price. Ownership isn’t guaranteed at the end; you may need to pay an additional fee to acquire the asset.

No Ownership During the Lease Unlike Hire Purchase, where ownership transfers after the final payment, Finance Leasing typically doesn’t grant ownership until the lease ends and the purchase option is exercised. This can be a disadvantage if you seek long-term ownership.

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Tailored Business Solutions

Every business has unique needs. Our brokers collaborate with you to design a finance leasing plan tailored to your specific operational and financial requirements.

Industry Expertise

Leveraging a wide panel of lenders and extensive market knowledge, we secure competitive rates and terms to help your business achieve its goals.

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Hassle-Free Process

We simplify the finance leasing process, providing specialist guidance and handling the complexities so you can focus on driving your business forward.

FAQs

Your questions about Finance Leasing answered

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What is a finance lease?

A finance lease is a flexible funding solution that allows businesses to use assets without owning them outright. It’s a popular option for companies looking to preserve capital and manage cash flow effectively.

What assets can I lease with a finance lease?

The lenders we work with offer finance leases for a variety of business-critical assets, including:

Vehicles (cars, vans, and fleets)
Plant and machinery
Office equipment
IT systems

If you're unsure, contact us to see if your required asset qualifies.

Is finance lease suitable for my business?

Finance leases can be ideal for businesses looking to:

Avoid tying up capital in depreciating assets.
Maintain flexibility at the end of the lease term.
Gain access to high-value equipment without upfront costs.

What happens at the end of the finance lease term?

You have three main options:

Extend the lease with agreed terms.
Return the asset and upgrade to a new one.
Purchase the asset by paying a nominal secondary rental fee.

How are finance lease payments calculated?

Lease payments depend on:

The asset’s value.
The length of the lease term.
Your business’s creditworthiness.

What are my options if I don’t want to keep the asset at the end of the finance lease?

If you don’t want to keep the asset at the end of your finance lease, you have several flexible options:

Extend the Rental Period: Continue leasing the asset by entering a ‘secondary rental period,’ allowing you to keep using it without ownership.

Sell the Asset: Sell the equipment at its fair market value to an unrelated third party, keeping a portion of the proceeds.

Return the Asset: Some funders allow you to return the asset if it no longer meets your business needs.

These options provide flexibility to adapt to your business goals.

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