Finance Lease for Smart Business Solutions

If you own a business and need to supply your workforce with professional standard vehicles but lack the funding to pay for them then entering into a finance lease is perhaps the most appropriate solution to your finance problems. Finance lease is an alternative to hire purchase and enables business owners to have a lot more freedom when it comes to vehicle finance. A finance lease allows business owners the chance to lease high quality models with minimum initial outlay and lower monthly payments that can be tailored to suit the individual needs of your business. A finance lease also has potential tax and VAT benefits for many businesses making it an ideal finance method.  

 

A finance lease agreement is very similar to a contract hire agreement apart from the fact that at the end of the lease the responsibility of the sale of the vehicle remains with you instead of the leasing company. This means that any potential risk, for example if the vehicle has lost value the amount of money needed to account for the agreed sum will have to be supplied by you. On the flipside of this, any profit made will also be yours. As with most leasing agreements with a finance lease you will also be given the option of a maintenance package ensuring that any mechanical issues and vehicle upkeep in general is taken care of by the leasing company. 

 

There are numerous benefits associated with car finance lease starting with the low initial outlay for the vehicles and the lower monthly payments. Due to the nature of a finance lease, most leasing companies will alter the leasing arrangements to suit you and your company’s cash flow. For example, many companies choose to defer payments in order to lower their monthly charges but settle the bill using a balloon or final payment at the end of the contract. However, it is not unusual for the entire cost of a vehicle to be covered using the monthly payments.

 

Another attraction that finance lease offers business owners is that more often than not a higher specification of car models available for a much lower initial outlay and monthly payment scheme than would otherwise be affordable. Leasing a luxury vehicle through a finance lease can also play to your advantage at the end of the agreement when the vehicle is sold.  With finance lease, the end responsibility for the sale of the vehicle lays with you so any loss or profit incurred will by you and your company.

 

For businesses, perhaps the most significant advantage of a finance lease is the potential VAT and tax benefits that can be gained through entering into a finance lease agreement. Any vehicles funded through finance lease or contract hire agreements will show as leased assets on your company balance sheets making them a revenue expense that may be offset against your taxable profits. In nonprofessional terms, this means that businesses can gain all the benefits that are associated with vehicle ownership whilst enjoying maximum tax efficiencies and minimising the initial outlay payment for the vehicle.

 

The only real disadvantage of finance lease is that your company will never actually own the vehicle, as even when the vehicle is sold it must be to a third party, however, as explained previously there is potential to make profit upon sale of the vehicle. The added tax benefits also make it much more appealing to businesses than actual vehicle ownership in the long run anyway. If you are a business owner and are looking for a car finance lease solution visit www.carleasingandhire.co.uk for more details.