A Balanced Payment Plan offers the benefit of a fixed monthly payment, however unlike Hire Purchase, where the interest amount is fixed a Balanced Payments plan tracks any changes in LIBOR or Finance House Base Rate depending on the lender who has underwritten the agreement. As rates rise or fall over the period of the contract then so does the interest charge that is paid.
A Hire Purchase agreement offers a fixed monthly payment along with a fixed amount of interest that is spread and repaid over an agreed period of time.
The term will usually vary between 12 and 60 months however on different types of asset this period may be extended to approximately 84 months.
Hire Purchase is also available with a final “balloon” payment that may be paid or refinanced at the end of the agreed term.
Lease Purchase is also known as “Hire Purchase Balloon” and offers lower monthly payments than conventional Hire Purchase as part of the capital repayment has been deferred. The payments are spread over an agreed period of between 24 and 60 months and at the end of the agreement there is a final “balloon” payment that can be paid to own the vehicle or sometimes refinanced.
A Finance Lease is predominantly used for the funding of business assets and would be classed as 'On Balance Sheet'
Finance Lease rentals are usually calculated on the Ex VAT price but would attract VAT during the agreement.
The customer is not entitled to become the owner of the goods but is entitled to sell the goods at the end of the agreement retaining normally around
95% of the sale proceeds.
An extended opportunity to continue leasing the asset is available by entering into the secondary period of the agreement with predetermined annual rentals.
To help aid business cash flow we may also offer the opportunity to refinance unencumbered business assets however this may be depend on age, value and condition.