What is lease exactly?
A tax efficient borrowing facility specially designed for businesses acquiring equipment. The finance company buy equipment on behalf of the customer and then lease it back to them over an agreed term.
How is a lease different from a loan?
A lease is an agreement to make payments for a specific amount of time for the right to use the equipment owned by the lease company. As the leasing company owns the equipment every £ spent can be offset against Tax liability i.e. 100% of the cost
Are all leases the same?
No. There are 3 main types.
- Lease Rental – 100% tax allowable
- Lease Purchase.
- Master Lease – Open-ended lease allowing you to continuously add to the lease.
How long for an approval?
Approvals are usually accomplished within 4 working hours, depending on the size of the transaction and all submitted information is correct and complete.
Why is a lease so tax efficient?
Every lease payment is 100% allowable as a tax-deductible expense, therefore reducing the real cost of your purchase. A cash or loan purchase will only allow a small percentage write off in the first year, reducing each year thereafter.
Is borrowing from a bank cheaper?
Initially payments are probably lower, but over the course of the lease the greater tax savings will mean the lease compares favourably with a bank loan. Depending on your circumstances it may even be cheaper to lease.