All businesses require financial support to help develop and grow. The Agricultural, Civil Engineering and Construction industries are no different. In particular, deciding to invest capital in new vehicles and machinery can be a major decision for your company.
Every business is unique and may need to choose one or a range of finance products to suit their individual business requirements. It may be equally important to keep your business operations flexible. This requires products that are just as adaptable especially when it comes to repayments.
Whether it is a Car, Van, 4 X 4, Tractor or a Digger there are different options available when it comes to financing the buying of vehicles and machinery:
Benefits of Hire Purchase
Hire Purchase is the most commonly acquired asset finance and provides the benefits of ownership without incurring the full capital outlay at the outset. Payments are agreed in advance and are fixed for the life of the agreement.
- Hire Purchase gives you the freedom and flexibility of a cash buyer but without the initial capital outlay – deposit only required
- The cost of your capital assets is spread over a pre-determined period usually 2 – 5 years, preserving your cash flow for use in the business
- Flexibility – repayments can be structured to allow for seasonal fluctuations in business
- VAT is normally paid on signing the agreement – no VAT payable on repayments
- Interest charges may be offset against taxable profits
Benefits of Leasing
Lease finance is an off-balance sheet method of financing assets for business use. The finance company will purchase the asset and the lease cost is spread across fixed monthly rentals. Ownership of the asset remains with the lender.
No heavy initial outlay and fixed repayments help cash flow and budget planning
Capital allowance benefits reflected in rental payments
VAT payable on rentals as opposed to one lump sum, normally recoverable if you are VAT-registered
Rentals generally allowable as a revenue expense
The agreed period of the lease is calculated within the working life of the asset
At the end of the agreed lease period you can choose to terminate the contract by informing the lender
to sell the asset, or you can extend the lease term by paying a small annual rental for as long as the asset is required
Benefits of Contract Hire
Contract Hire is an increasingly popular way of financing cars and light commercial vehicles; – contract hire specialists will also manage your asset for you if you choose e.g. scheduled servicing and maintenance.
Capital allowance benefits reflected in rental payments
Contract Hire helps budgeting and cash flow and can make off-balance-sheet funding possible.
The hire of the vehicle is for an agreed term and at the end of the period the finance company or the Contract Hire company disposes of it.
You never actually own the vehicle as ownership remains with the finance company throughout the agreement.
No heavy initial outlay or unforeseen operating cost.
Possible VAT recovery on monthly payments.
Tax allowance on lease payments.
How can Rural Finance NI help you grow your business? Based in Northern Ireland we provide the keenest rates to support local farmers and construction businesses. We can provide finance for all your Agricultural & Plant Machinery (new & used) and our aim is to provide the most competitive loans for farmers and businesses alike through our network of extensive lenders. You supply us with the details and we will provide you with a quotation and turn around your proposal in a little as a few hours. Being on the ground in Northern Ireland we are also able to sign the necessary paperwork at a location which is to your convenience – your workplace or home. Let us show how simple we can make the process for you by clicking onwww.ruralfinanceni.co.uk