The purchase of an asset by paying for its cost by instalments over a fixed term. Ownership of the asset remains with the Hirer until at the end of the agreement at which point the customer has the option to take legal title to the assets for a ‘one off’ nominal sum.
Benefits of hire purchase:
- Manage cash flow by purchasing the asset over the term of the agreement.
- The asset is capitalised on the customer’s balance sheet.
- At the end of the agreement title of the assets passes to the customer for a nominal sum.
- The customer can claim the capital allowances.
- The interest element of the payments is tax deductible.
- The customer can borrow as much as required up to the cost of the assets.
Most equipment and vehicles can be financed by hire purchase and the term depends on the economic life of the assets. Ibex Finance has experience in arranging hire purchase for most assets across a wide range of sectors.
A master agreement can be arranged by Ibex Finance with agreed terms and conditions between the Hirer and the customer for all future equipment or vehicles to be financed. A schedule to the master agreement is then drawn up for each requirement over a fixed term.