Finance Products

Finance Products

Hire Purchase
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Hire purchase contracts are a fantastic way to purchase essential equipment and vehicles without using up cash reserves.

With hire purchase agreements, you will own the asset at the end of the finance period. But, rather than pay out a hefty cost immediately, you are paying the cost of the asset monthly or quarterly, spreading the cost with terms that suit your business. 

A popular option for many customers, hire purchase agreements are straightforward and flexible. With a wide range of options for structuring your terms, hire purchase is commonly associated with financing hard construction assets such as vehicles, plant and machinery.

Hire purchase offers great value Fixed Rate or Variable Rate contracts. Repayments are made either monthly or quarterly, with a deposit paid upfront or within the initial periodic payments. Your repayment structure can suit your business, with equal monthly repayments, accelerated, seasonal and payment holiday structures considered.

PCP
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A Personal Contract Purchase (PCP) is a tripartite agreement similar to Hire Purchase. PCP is one of the most popular forms of vehicle financing because it gives the customer flexibility at the end of the agreement and initially a lower monthly payment compared to alternative products like Hire Purchase. It is available to both private and business customers. PCP is different from Hire Purchase because of its payment profile and structure. The customer’s repayments are determined by the size of the deposit, the predicted mileage and the length of the agreement. (PCP) is a widely used vehicle finance option in the UK, allowing consumers to finance a new or used car with flexibility and often lower monthly payments compared to traditional car loans. A PCP balloon payment is therefore referred to as the Guaranteed Minimum Future Value (GMFV) or ‘optional final payment’ and is based on the value the finance company predicts the vehicle to be at the end of the agreement.

At the end of the agreement the customer has the option to:

  • Pay the balloon payment and keep the vehicle.

  • Hand back the vehicle without incurring further costs.

  • Trade in the vehicle for a replacement.

Refinance
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Refinancing is a financial arrangement where a business uses its assets as collateral to secure a new loan or restructure existing debt. This can improve cash flow by securing lower interest rates or longer repayment terms, thereby reducing monthly payments. It can also consolidate multiple debts into a single payment, simplifying financial management.

Refinancing can reduce overall interest costs if current rates are lower than when the original loans were taken. Additionally, it provides access to extra capital for growth and investment. Aligning debt with cash flow capabilities improves financial stability, and managing refinanced loans well can enhance the business’s credit profile, making future borrowing easier and more favourable.

Finance Lease
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A Finance Lease is a form of flexible leasing to fund the use, but not the ownership, of a vehicle and is ideally suited to VAT-registered businesses. The leasing company (lessor) hires the vehicle to the  customer (lessee) for an agreed period of time (the primary period of hire) for an agreed monthly sum. Finance Lease agreements can be regulated or unregulated under consumer credit legislation. This all depends on the type of customer and the total amount of the rentals.

A Finance Lease often requires, or provides an option for the customer, to sell the car as an agent of the leasing company (lessor) at the end of the agreement. Under a Contract Hire agreement the customer will always hand back the vehicle to the lessor.

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