Spread the cost, own it at the end.
Hire purchase is a possible way to finance a business asset through an agreed payment structure. Deposit, payment profile, VAT, term and ownership conditions depend on the proposed agreement, provider, asset and customer circumstances.
At a glance
- Assets and amounts considered case by case
- Term options depend on the asset and provider
- Rates and fees are confirmed in a formal proposal
- Deposit and payment structures depend on the agreement
- Ownership conditions are set out in the agreement
Broker
Independent
Timing
Case by case
Terms
Subject to review
From enquiry to business momentum.
Enquire in 60 seconds
Tell us about the asset, the amount and the timing so we can focus the conversation on your business plans.
We get to know your business
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.
How business hire purchase actually works.
Hire purchase (HP) lets you acquire an asset without paying the full price upfront. Depending on the agreement, you may make a deposit followed by scheduled payments over an agreed term. The legal ownership and security arrangements are set out in the specific contract.
If the agreement includes an ownership-transfer option, it is subject to the contractual payments and any applicable end-of-term conditions or fee. We will explain the proposal before you decide whether to proceed.
Asset suitability depends on its type, age, use, supplier, expected life and the provider’s criteria. Vehicles, plant, machinery and equipment are common discussion areas, but no asset type is automatically eligible.
Worked example
£60,000 box van
5-year hire purchase, 10% deposit
- Deposit (paid day one)
- £6,000
- VAT timing
- Agreement and tax-position dependent
- Amount financed
- Depends on deposit and fees
- Payment profile
- Confirmed in formal proposal
- Ownership option
- Set out in agreement terms
Illustrative structure only — it is not a rate quote, lending decision, tax assessment or formal offer.
Points to discuss when considering hire purchase.
Get the kit you need now
A hire-purchase structure may allow a business to use an asset while making payments under an agreed contract.
Preserve existing credit lines
The effect on existing banking arrangements and borrowing capacity depends on the customer’s circumstances and the proposed agreement.
Structure deposit to suit cash flow
Deposit requirements and payment profiles depend on the asset, provider, agreement and customer circumstances.
Consider tax and accounting treatment
Capital allowances, VAT and accounting treatment depend on the asset, agreement, entity and current rules. Speak to your accountant or tax adviser.
Understand the proposed payment profile
Whether payments are fixed, variable or structured in another way depends on the formal agreement. Rates and fees are confirmed in a proposal.
Ownership conditions set out in the agreement
Ownership may transfer only when the agreement’s payments and any applicable option-to-purchase conditions have been met.
Hire purchase, answered.
What happens at the end of a hire purchase agreement?
The ownership and end-of-term provisions are set out in the agreement. They may include an option-to-purchase condition or fee. We will explain the relevant terms before you decide whether to proceed.
Are hire purchase payments tax deductible?
Tax treatment depends on the asset, agreement, entity, use and current HMRC rules. Capital allowances, VAT and finance charges can be treated differently. Speak to your accountant or tax adviser before relying on a tax outcome.
How much deposit do I need?
Deposit requirements vary by asset, provider, proposed agreement and customer circumstances. Any available structure and payment profile will be set out in a formal proposal.
What about the VAT?
VAT timing and recovery depend on the agreement, asset and your VAT position. Speak to your accountant or tax adviser about your circumstances, and review the provider’s proposed terms.
Can I settle the agreement early?
Early settlement rights, calculations, fees and any rebate depend on the agreement and applicable law. Ask the provider for a settlement figure and review the contractual terms.
What if my credit isn't perfect?
Provider criteria and availability depend on the asset, business, financial information, credit context and the provider’s current approach. An enquiry does not confirm approval or pricing.
Continue your research