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Category: Finance

An operating lease works differently to a hire purchase. With this type of finance you hire the equipment from the lessor over a fixed term, and come the end of the term, the equipment is returned to the lessor for sale.

This type of agreement suits businesses who only need equipment for part of its working life or will upgrade again soon. The risk and rewards of owning the equipment stay with the lessor which means you don’t have to worry about depreciation or what to do with the equipment at the end of the agreement.


There are three benefits to an operating lease: cost, risk and flexibility. Cost because a residual value is built into the agreement which lowers your monthly payments (you basically pay the depreciation on the equipment plus our fee). Risk because the lessee has no residual value risk. And flexibility because the lessee isn’t tied into owning the equipment long-term (which also makes you more agile).

It is also possible for the lessee to claim capital allowances on an operating lease if the lease is not deemed a sale. Plainly this means the payments you make to lease the equipment can be expensed against your company’s annual pre-tax income.

When you combine the benefits of cost, risk and flexibility, as well as the tax advantages, it’s easy to make a case for an operating lease.


There are two downsides to an operating lease: term and ownership, although whether these are downsides to you depends on what you want. Term because when you enter into an operating lease you commit to keep the equipment for a period of time. And ownership because you will never own the equipment. Regarding the latter, some agreements also give no option to buy outright should you change your mind.

Whether an operating lease for equipment is right for you depends on your average asset lifecycle. If you only need equipment for part of its working life or you operate in an industry where equipment becomes obsolete quickly, an operating lease lets you use the best equipment over a relatively short term without paying the retail price. Come the end of the agreement the equipment goes back, and you then have the option to lease new equipment on a fresh agreement. It is a cycle many businesses use.

If you would rather own the equipment outright after your finance agreement ends, the best finance facility for you is a hire purchase. This agreement has higher monthly payments because there is no residual balloon built in. You pay the retail price of the product plus our fee over a term that makes repayments affordable.

Want to know more?

Is an operating lease for equipment right for you? Whether yes or no, we can help arrange the right finance. Speak to one of our experts today – call us on 01234 240 155 or email us at to get started.

A sale and lease back is a straightforward finance facility in which a business sells an asset to a buyer and leases it back from the buyer.

With this type of business finance, business owners have the opportunity to improve cash flow without interruption to daily operations. The lessor becomes the owner of the asset for the duration of the lease agreement, after which ownership may be passed back to the lessee at the end of the lease if the agreement says so.

The business advantages of a sale and lease back are five-fold.

  1. Lower rates

It is usually the case that a sale and lease back is more economical than other types of finance. This is because the purchase is secured against the equipment, which means a lower risk for the buyer. The fees are lower as a result. Our monthly fees start from 3.6% making this an affordable way to raise capital.

  1. Tax advantages

With a sale and lease back the asset is treated as sold, the profit is amortised, and the finance lease back is usually treated as a separate transition. This means in most circumstances leasing costs can be offset against company profits as an operating expense, although your ability to do so depends on how the finance is recorded.

  1. Fixed payments

If you don’t want the hassle or uncertainty of irregular payments, then the fixed monthly payments under a sale and lease back will be appealing. We can’t speak for all lenders, but our rates are fixed, and you will repay what we buy your asset for plus our fee. This is over a term you choose, which can be 12 to 60 months.

  1. Low depreciation

Depreciation is over the shorter of the useful life of the asset and the lease term. You can usually take out a sale and lease back over 12 to 60 months. This means you can raise cash on a short or medium-term basis. If the asset or assets you wish to sell have a lower rate of depreciation, leasing them over a medium term is worthwhile.

  1. No downtime

A sale and leaseback allows a company to raise money from the sale of assets without actually handing the assets over physically. These stay in the business and never leave, so if you sell important assets like plant machinery these won’t be taken away. You can continue to operate as normal with no downtime.

  1. Frees up working capital

If you have assets that hold value then you have cash tied up in them. Rather than borrow new money like you would with a business loan, a sale and lease back finance agreement lets you release the value of existing assets. This finance is popular with asset rich businesses for this reason, who use sale and lease back agreements to raise working capital and fund their expansion and growth plans.

We specialise in sale and lease back agreements as part of our equipment refinance offering. Call us on 01234 240 155 to find out more.

As a prospective buyer of a business, you will have already done your homework to establish the true cost of acquisition. You should have accounted for hidden costs like travel and loss of revenue as a result of downtime or reduced productivity. But have you got a true estimate for the legal costs of buying a business?

Many investors who we have helped finance the purchase of a business have been flabbergasted by the legal costs solicitors charge. Solicitors quote a not unusual flat fee of 2 to 5% on acquisitions up to £500,000. However, there is disparity between quotes with local firms very often quoting sums that are far apart.

The truth is you do want to spend the extra on a good solicitor when buying a business because you need to be sure everything is covered. The old mantra “buy cheap, buy twice” rings true here but with riskier consequences.

Legal costs

We would say that on a purchase of a business between £250,000 and £500,000, it would not be unreasonable for a solicitor to charge £10,000 to £15,000 in fees. If you are purchasing a business for more than that, the services you require will likely be extensive and so the cost will be higher. On business finance proposals we have approved, some of our clients have been quoted a bill up to £20,000.

Regardless, you must get quotes from at least three solicitors. Two is not enough to benchmark. With three quotes you will have a good understanding of the ‘going rate’ and you will be able to query any quotes side-by-side.

The legal process

The solicitor you appoint to oversee the purchase will be with you for the duration of the stages of transaction, including structure planning, deal structure, legal due diligence, preparation of key documents (sale and purchase agreement, tax deed, disclosure letter, employment contracts for key management shareholders), pre-completion, completion, and post-completion. They will support you throughout.

There is a lot more to the legal process than you would expect and preparation of other key documents (not outlined above) is the reason for this. These documents include the heads of terms, exclusivity agreement, due diligence undertaken and warranties where relevant. A good solicitor will help you understand what these are and why they are essential to the buying process. Without them, a sale simply cannot proceed.

Because of the amount of legal work involved, solicitors charge a pretty penny to wave through a business purchase. Don’t underestimate the legal costs for buying a business and always get more than two quotes when looking.

It’s also important to be realistic. Most solicitors cannot invest the amount of time required to see through a business purchase for under £5,000. For them to be able to do that, you would have had to do most of the work for them. It’s always best to hire a good solicitor and pay their handsome fee to see a purchase through.

If you would like to finance the legal fees of your purchase, call our business acquisition team on 01234 240 155. We can usually transfer the funds the same day you call. If not, we can transfer the money within 24-hours.

Many reputable business owners have found themselves unable to pay their VAT bill on time because they haven’t set aside enough working capital.

You usually need to pay HMRC by the deadline shown on your VAT return. If the finances just aren’t there to do this, it’ll be a case of needs must first and for some that means delaying paying the bill until a reminder letter or ‘‘Surcharge Liability Notice’ comes through the door. This will certainly buy you time, although you may face penalties for doing so, and for this reason it is a false economy.

Planning ahead

If you’re struggling to pay your VAT, funding the bill in its entirety with finance is a legitimate option you have. We have helped a wide range of businesses pay HMRC in this way. VAT loans can help wipe the slate clean with HMRC and keep whatever capital your business does have in the business account.

If you haven’t filed your VAT return yet but your accounts show inadequate funds, you should take measures to put yourself in funds. You can bring invoices forward and collect what you are owed sooner. If there is no way, you can use finance to get yourself in funds well before the deadline and avoid the headache.

How does it work?

The way VAT finance works is relatively simple. You would apply for the finance close to your VAT deadline, so that payment can be made in good time. We would ask to see your VAT return and business financials, and providing we are happy your business is healthy, we will lend what you need against the return. You would then pay us back monthly. Your monthly payments will be made up of what you borrow plus a monthly fee. Our agreements do not have an interest rate because they are not a loan.

Your repayments will be fixed, and we can extend finance to you over a term of 12 to 60 months. We can finance your VAT return with a value of £10,000 to £500,000 although most VAT returns we finance are below £100,000. We can also part-fund your VAT return if you would like to only finance a percentage of it. This will take working capital from the business but reduce the amount you need to borrow from us.

Is VAT finance for me?

It’s important to remember every VAT registered business should ensure it is organised to deal with VAT. Finance is not a long-term solution to staying on top of it, but it can bail you out of a tricky financial spot. If you are struggling to pay your VAT or tax, we always recommend consulting with a financial advisor or Chartered accountant. They will be able to offer personalised advice and help with long-term planning.

To find out more about our VAT finance and other products like this, please call us on 01234 240 155 or email us at Thank you.

The high street might be struggling generally, but those with a strong brand and those offering a unique customer experience are continuing to thrive. From boutique clothing shops to coffee shops, there is still demand for those ‘nice little places’ and the convenience of useful stores in highly populated areas.

Refurbishing your shop is sometimes necessary to continue to provide a certain level of service or experience. It is also sometimes necessary following a period of ‘putting up’ with building annoyances, like damp and cracked floor tiles.

Whatever your reason for wanting to refurbish your shop, the good news is you can finance what you need for a low monthly fee. Financing your budget will allow you to spread the cost over a term that suits you. You will also have the opportunity to access more cash than you have in the bank. Keep what cash you do have to operate.


The need for refurbishment is a business function and should be looked at as an investment as much as an expense. Good refurbishments can offer a return quickly but the need to create a budget for the project is as important as ever.

Most refurbishments cost between £10,000 and £15,000 – this budget allows for new fixtures, fittings, some rewiring, plumbing and building work. You should budget £400 to £900 per square metre. It is possible to refurbish a store for £100 to £300 per sqm but in popular areas like London or for bespoke work this is unrealistic. It’s best to budget higher to avoid any delay in the project.

Keeping costs down

If you need electric, plumbing or building work, expect to pay the higher end of the scale depending on the design and quality of the finish. For example, regular plastering won’t cost a great deal, but polished plaster definitely will.

You can save lots of money on the fixtures and fittings. There is now no need to spend thousands of pounds on a chandelier or mirrors for your shop when you can get these from the web for much less. It’s important to remember no one knows how much things cost unless you tell them. You can get some excellent stuff from preloved and charity shops, but if you are looking for something specific head online.

You should also factor in marketing and promotion to announce your refurbishment and get customers through the door. Your budget for this will ultimately depend on the mediums involved. If you intend on using print media, it is usually worthwhile to use a graphic design agency to create these. This will ensure any flyers, brochures, posters or leaflets you use are on point and speak to your audience.

Once you have worked out your budget you can think about shopfitting finance. We can help arrange finance with our sister company and unlike a high street bank, we review applications in person to give you a fairer decision. We approve 98% of applications. Call us now to find out more on 01234 240 155 or email

Mechanical and hydraulic engineering machinery falls into the category of specialist equipment and therefore commands a handsome price. Fitting out a small metalworks can cost tens of thousands of pounds. Expand that to a factory floor and the cost of machinery can stretch to hundreds of thousands.

These assets are an investment, but the high purchase cost means cash poor engineering firms and manufacturers can be left window shopping.

If you are using outdated or inefficient engineering machinery or the machinery you use has become uneconomical due to high maintenance costs, now is probably as good a time as any to modernise your production floor. Engineering machinery finance is one way to attain the equipment you want quickly with little fuss.

The benefits of financing machinery

Most of the finance agreements we approve are for a hire purchase. The five benefits below are specific to this type of finance agreement.

Spread the cost

The way a finance agreement works is relatively straightforward – the equipment will be on a hire purchase agreement. This is where your lender will own the equipment and hire it back to you over a set term. This lets you spread the total cost of the equipment over a term that is affordable for you.

Low fees

The finance agreements we arrange through our sister company do not have an interest rate because they are not a loan. They are a hire back agreement. And so there is a monthly rental fee added to each payment instead. Our fees start from just 3.6% and the fee you are offered is fixed, meaning your payments are too.

Tax benefits  

Under a hire purchase ownership of the equipment stays with the lessor and only passes to the lessee at the end of the term and after all payments are made. The interest therefore is tax deductible on a hire purchase. VAT is also payable on the rental, not the purchase price, making it a very tax efficient type of finance.


Unlike an operating lease with a hire purchase you will build up equity in the equipment because you are effectively paying off the purchase price. After you have made all your repayments and ownership passes to you, you will still have a valuable asset which you can then use to raise additional funds through refinancing.

Easy to obtain

Compared to a traditional business loan a hire purchase agreement is easier to obtain because there is security for the lender in the form of the equipment itself. This reduced risk means a greater chance of approval. For example, we approve 98% of applications and have helped many engineering firms finance new machinery.

If you own an engineering firm or operate a workshop and are in need of engineering machinery finance, speak with our finance team today. Call us on 01234 240 155. We are open 7 days a week, or you can email us at

Yes, you can re-claim the VAT on a hire purchase agreement, but your business must be VAT registered itself to do so. The agreement must also be under the business’s or company director’s name to demonstrate it is for a business purpose.

With a hire purchase agreement the purchase is recorded the same as an outright purchase and the finance charge is also normally an allowable expense. VAT is payable at the first payment installment and reclaimable. In the case of goods, VAT is shown as a separate value which makes it easy to separate its cost from the purchase.

You reclaim the VAT on a hire purchase on your next VAT return. This is quarterly or monthly if you have been registered 12 months or more. You can usually reclaim the VAT on a hire purchase up to 4 years after signing the agreement.

What about vehicles?

Vehicles are a bit different. With commercial vehicles purchased on a hire purchase agreement, you claim all the VAT (100%) on the purchase but NOT on the monthly payments. Leases are different in that you claim all the VAT on the monthly payments, not the purchase. This is the difference.

It is necessary to demonstrate to HMRC that the vehicle under the hire purchase is for commercial use only. It cannot be for private use. If it is for both, you will only be able to reclaim the business proportion of the VAT. Up to 50%.

Business purpose

To reclaim VAT on a hire purchase you will need a valid VAT invoice and the equipment purchased must be demonstratable as for a business purpose. This can be satisfied by either the business or company director signing the agreement at point of sale, but the entity signing must be VAT registered for it to work.

In assessing whether the goods purchased under a hire purchase are for business use, consideration should be given to whether the goods directly relate to the function and operation of the business. If the answer is no, they may not be classed as allowable for VAT exemption. Honesty is the best policy here.

Other tax writing down allowances

Hire purchase agreements have one other business tax benefit – you can offset repayment interest against taxable profits. What this means is you won’t pay tax on the cost of a hire purchase agreement. So, for example, if the total cost of your agreement is £1,101, you won’t have to pay tax on that amount. It is an allowable expense. However, you must claim it to get it. It isn’t HMRC’s job to pick this up for you.

Again, you can only offset repayment interest against company profits if the hire purchase agreement through which interest is charged is for a business purpose. You can’t offset your personal car through company accounts, for example.

Hire purchase agreements have tax benefits for business and make expensive equipment affordable by spreading the cost. Call us on 01234 240 155 or email us at to arrange a hire purchase. Thank you.

Many business owners find they are asset rich but cash poor. Property wealth and equipment wealth are great things to have in your locker, but they are inflexible. They don’t put money in the bank and if you are reluctant to “cash out” (perhaps you need your assets to function) there isn’t an obvious solution to the issue.

You do have a few options though.

Asset refinance

Asset refinance is the best finance option in this scenario. It releases cash tied up in business-owned assets.

The concept is simple: if you have valuable assets sitting in your business, they already have a monetary value. But as it stands that value is tied up. What refinancing does is release that value back into the business by securing a loan against the assets. The loan is paid directly to you and the equipment stays with you. The lender becomes the owner and effectively “hires back” your assets during the agreement term.

Refinance is a good option if your assets cover the amount you wish to borrow, and you might be pleasantly surprised by how much you can borrow. We will assess and value any equipment you want to refinance. The valuation process is non-intrusive, and we can lend up to 100% of the valuation in many cases.

The result is asset refinance will put money in your bank to use as you please. This could be tens of thousands of pounds. If you are an asset rich but cash poor business, this is the ticket to injecting more working capital into the company.

Hire Purchase

If you want to purchase new equipment or machinery but you lack the cash to do so, a hire purchase agreement lets you spread the cost.

Hire purchase agreements have reclaimable VAT and the interest paid on them (if applicable) is tax deductible too. We recommend a hire purchase if you want to own the hired equipment at the end of your agreement. The way this works is the lender purchases the equipment from the seller and then hires it back to you. You repay the lender over a set term. At the end of the term, ownership passes to you.

Hire purchase is a good option if you wish to invest in new equipment. Unlike asset refinance which puts a lump sum in your bank, a hire purchase spends money for you on an asset of your choosing. It’s a flexible way to buy new stuff.

If you have no desire to own the equipment at the end of your agreement (for example, if you plan on returning it) there may be a financial benefit to a straight lease. A lease agreement offers lower monthly repayments than a hire purchase. The key difference is you won’t own the equipment at the end of the agreement.

Your options in a nutshell

If you’re asset rich but cash poor, you can refinance your most valuable assets to inject working capital into your business. This gives you a lump sum. If you just want to buy new equipment, a hire purchase lets you spread the cost.

Interested in either of these? Speak with our refinance and hire purchase team. Call us on 01234 240 155 or email us at

Companies who may struggle to pay their corporation tax or VAT bill for this accounting period can relieve the pressure with VAT loans. We have assisted several companies with their tax payments. The application process is simple, and you could have your funds in as little as 24-hours with a decision made in 2.

Many companies find they are short of funds when their tax is due. This can be because of a higher than expected bill, or just because the money has been spent.

We’re not here to advise you on how to manage your cash flow, but we can help you pay your tax by arranging finance for you. There are five reasons why financing your tax bill is a good idea. You can also quickly apply for tax finance here.

  1. Splits your tax into manageable payments

If you can’t afford to pay your tax in full, it stands to reason you could afford to pay it in fixed monthly instalments. Finance offers you the opportunity to do just that, with low fees ensuring the cost of the agreement stays low. If you can’t afford the £15,000 HMRC wants, it makes sense to split it so you can.

  1. Avoids fines

The cost of this type of finance is lower than HMRC’s fines. The penalty for filing a CT600 return 1 day late is £100. Another £100 is added after three months and then a 10% penalty (based on your corporation tax assessment) is added after 3 months. The costs quickly spiral and could leave you with a hefty bill.

  1. Retains working capital in the business

Keep what money you do have in the business. Tax finance will give you what you need to pay what you owe so your own money stays untouched. This can be used as working capital or saved to pay your next tax bill. It’s up to you. Many companies choose to keep hold of the money, so they don’t have to borrow again.

  1. Repay what you owe over a term that suits your business

You can borrow what you need over one to five years. Borrowing over a longer period will reduce your monthly payments but the cost of the finance will be higher. Borrowing over a shorter period will increase your monthly payments but you will pay less overall. You should borrow over a term that makes your payments affordable.

  1. Spend more time running your business and less time worrying

Running your business is challenging enough. The last thing you need is to feel as though the walls are caving in and HMRC are breathing down your neck. If you finance your tax, you will clear the slate with HMRC for the accounting period. The issue of paying your tax will be done and dusted, leaving you to get on with running your business.

To find out more about our tax finance or to see if you qualify, call us now on 01234 240155 or email us at

If you have a passion for arts and crafts, you could turn that passion into a prosperous business if you’re up for it. Many people start out making small gifts at Christmas time and other seasonal events, which they sell to friends and family. Taking this concept to a higher level (for example, with a website that generates sales) is possible but you will need capital to make it happen. That’s what finance is for.

From making candles to watch straps, whatever it is you make this could work. You can borrow what you need from us over one to five years. The average cost to setup a crafts business is £10,000. You can do it for far less working out of your kitchen and selling on Etsy, but that isn’t a professional operation.

£10,000 might sound like a lot when you’re used to picking up materials for a few quid, but launching your own website costs a chunk. Ongoing marketing costs are very expensive, and you will need to hire an agency to manage this side of things because you can’t do everything. Your time will be invested in making products. If you attend fairs a lot of your time will be taken up travelling, and time is money.

We have helped a number of people take their passion for arts and crafts and transform it into a fully-fledged business. As a start-up, we can offer you specialist funding secured or unsecured to suit you. With an arts and crafts business, profits can be low so we will want to know how you intend to make it work.

We will ask to see your business plan and financial projections. We will also want to chat with you about your experience and what your business will do. Think of it as a character assessment. We basically want to know who we are lending to.

We are specialists in analysing business plans and comparing them to the state of the market sector to see which have real potential and which aren’t going to be able to return on investment. Providing we’re happy with your business plan, experience and drive, we’ll lend to you. We will also need to run a credit search on you. This is necessary to determine you are who you say you are and your credit history.

We can lend new businesses money unsecured or secured. Secured finance can be easier to obtain because you secure the amount against an asset. Unsecured funding carries higher risk for the lender so usually has a higher introductory interest rate. This will increase your monthly repayments. You must factor these into your business plan and financials when you apply for finance.

Moving into the real-world of business from selling a few things you make in your spare time is a big step up. Most people are up for the step but lack the finance to do it. If you’re in a similar position, talk to us. Call us on 01234 240 155 or email us at to speak with our team about finance for start-ups. Thank you.

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