Use the kit, spread the cost.
A finance lease is a rental-based way to fund business equipment over an agreed term. Deposit, VAT timing, rentals, tax treatment and end-of-term options depend on the proposed agreement, provider and your circumstances.
At a glance
- Deposit and VAT timing depend on the agreement
- Assets, terms and structures considered case by case
- Rates and payments are confirmed in a formal proposal
- Tax and accounting treatment require professional advice
- End-of-term options depend on the agreement
Broker
Independent
Timing
Case by case
Terms
Subject to review
From enquiry to business momentum.
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Tell us about the asset, the amount and the timing so we can focus the conversation on your business plans.
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A dedicated account manager gets to know your goals and helps shape the right finance conversation.
We explore suitable provider routes
We consider suitable provider routes based on the asset, the information available and the circumstances described.
Move forward with clarity
Your account manager talks you through the options and helps you choose the next step for your business.
Finance lease vs operating lease.
Finance Lease
Pay (most of) the asset's value
Fixed monthly rentals over a primary term that pay down the bulk of the asset's value. At end of term you can extend at peppercorn rates, sell on the lender's behalf, or return.
- · Best for kit you'll use for the long-term
- · Risk and end-of-term obligations depend on the agreement
- · Tax and accounting treatment need professional advice
Operating Lease
Pay only the use, not the asset
Rental, residual-value and return arrangements depend on the provider and agreement. We can explain the structure offered for the asset you are considering.
- · Best for cars, IT and rapidly-depreciating kit
- · Residual-value and return conditions vary by agreement
- · Refresh timing depends on the asset and proposed terms
Three options when the primary term ends.
Option 1
Continue renting
Some agreements offer a secondary rental period. The availability and cost depend on the agreement and provider.
Option 2
Sell on the lender's behalf
Some agreements may allow the asset to be sold on the provider’s behalf. The process, costs and any share of proceeds depend on the agreement.
Option 3
Hand the asset back
Return may be available under some agreements, subject to the contractual condition, notice and end-of-term requirements.
Boost cash flow
A finance lease can offer regular rentals. VAT timing depends on the agreement, the asset and your tax position.
Enhance financial flexibility
Tax treatment and the impact on your wider funding arrangements depend on your circumstances and professional advice.
Cost predictability
Where fixed payments are available, they can support budgeting. Rates and terms depend on the proposed agreement.
Safeguard your assets
Legal ownership, risk, accounting treatment and security arrangements depend on the agreement and applicable reporting standard.
Finance lease, answered.
What's the difference between finance lease and hire purchase?
Hire purchase and finance lease are different contractual structures. Ownership, VAT timing, deposit, tax and capital-allowance treatment can vary by agreement, asset, provider and customer circumstances. We explain the available structures, but you should take tax and accounting advice for your position.
Will I own the equipment at the end?
Not automatically. The available end-of-term options, including any secondary rental, sale process or return, depend on the agreement and provider. We will explain the relevant terms before you decide whether to proceed.
What's an operating lease?
An operating lease is a different leasing structure in which the provider may retain a residual-value exposure. Asset suitability, return conditions, rentals and end-of-term options depend on the agreement and provider.
Are lease rentals tax deductible?
Tax treatment depends on the agreement, asset, use, entity and applicable tax rules. Capital allowances, VAT and rental treatment can differ. Speak to your accountant or tax adviser before relying on a tax outcome.
How long are typical lease terms?
Terms vary by asset, provider, proposed structure and customer circumstances. We will explain the available term options before you decide whether to proceed.
What about IFRS 16 / FRS 102 accounting?
Accounting treatment depends on the applicable reporting standard, your reporting period, the agreement and your entity’s circumstances. FRS 102 was amended with a principal effective date of 1 January 2026. Speak to your accountant for advice on the treatment of a proposed agreement.
For background on the FRS 102 amendments and lease-accounting factsheets, see the Financial Reporting Council’s FRS factsheets. Professional advice is required for the accounting treatment of any proposed agreement.
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