We offer flexible, cash flow-friendly business hire purchase agreements. With this solution, your customers will benefit from a payment model that can be structured around their needs – and you’ll benefit from more profitable customers.
What is a business hire purchase agreement?
New equipment and machinery can be expensive for a company. A replacement forklift truck, for example, may be more efficient than an already owned, but rapidly deteriorating model – but where your customers see an opportunity for substantial productivity gains, their accounting teams may see a large hole in the annual budget and cash flow issues.
A business hire purchase arrangement may represent a way to bridge this gap for your target audience. It works simply: the customer normally pays the full VAT upfront with repayments over an agreed contractual period, before taking full ownership of the item. To further reduce rentals a part-exchange, deposit, or balloon rental can be added to the payment profile.
Why arrange a business hire purchase agreement for your customer?
There are many benefits to providing your customers with business hire purchase agreements. Chief among these is the financial predictability. Large upfront purchases can be damaging to cash flow, and it can be far easier to spread them over a period of several months, or even years.
A business hire purchase agreement with BNP Paribas Leasing Solutions can range from 12 to 84 months in duration, depending on the asset. Tax benefits such as Annual Investment Allowance and Writing Down Allowance can reduce their expenditure further.*
There is more to it than mere finance, however: the flexibility is a key advantage of this kind of agreement. The deposit amount, the contract length, and the frequency of repayments – monthly, quarterly, biannually, or annually – are, to an extent, at the customer’s discretion. Sometimes the customer has the option to adjust the business hire purchase agreement to suit their cash flow requirement – for example, to match a seasonal income cycle. Your customers will appreciate the flexibility.
What’s more, because all terms are agreed upfront, the customer’s contract will always protect them against any increase in interest rates – and the interest element of payments can be registered as a tax-allowable expense.
*BNP Paribas Leasing Solutions is not authorised to provide tax advice. Business customers should refer all tax related matters to their company accountant / auditor.
Why BNP Paribas Leasing Solutions?
At BNP Paribas Leasing Solutions, we see all our leasing options – from hire purchase to finance leases and beyond – as business enablers. Our team of experienced specialists can draft an agreement that meets your company’s immediate and long-term operational needs – as well as those of your clients.
The right equipment can be the difference between a competitive business and an unproductive one. Our accessible, manageable, and flexible finance products can bridge this gap – giving your customers the assets they need without straining their budgets, and freeing up internal resources that could be put to better use elsewhere. When you supply your customers with a hire purchase agreement, you’re not just selling them equipment: you’re offering them the ability to pay for it in a way that suits their business priorities.