Most business owners desire to have the latest equipment and machinery mainly because it can make a positive difference towards a businesses performance. Having the amount of money needed at hand could be a challenge for some but thanks to the different financial products available for business owners, you could have that car or equipment at your doorstep sooner than you expected it. In this article, we will discuss more on Commercial Hire Purchase, helping you decide whether it could be your go to finance product.
A Commercial Hire Purchase Loan is a finance product used by business owners where they get to hire business equipment, cars, trucks from a lender for a fixed monthly repayment over an agreed period of time. It’s also known as Hire Purchase (HP) or an offer to hire. As much as ownership of the asset belongs to the lender at the moment, you still have access to use the car or equipment for your own benefit.
The Lender may agree to purchase the car or machinery on your behalf then hires it back to you over a set period of time. Once you complete making the repayments in full as per the contract including any interest fees, that’s when ownership is transferred to you. The repayments can either be monthly, weekly or fortnightly. When making a repayment, you could opt to make a residual payment/balloon payment to lower your regular monthly installments. Note that some lenders may require down payment or deposit which could also significantly reduce your monthly repayments as well.
This loan could be a great option for business owners, sole traders, partnerships and companies because they don’t have to tie down funds into purchasing a car or machinery as they can easily make manageable monthly installments. It’s also a flexible loan contract that is placed on a fixed interest rate hence the borrower could identify the real cost of the car or equipment. Since the vehicle is being used for business purposes, you may be eligible for tax deduction. Some of the equipment this loan can finance include manufacturing machinery, cars, trucks and commercial vehicles, computer and IT systems, cranes and construction equipment.
Once you know what type of vehicle or equipment you want, contact us at Braid Finance to complete a simple application. We will let you know what supporting documents to provide to ensure the application process goes as smoothly as possible. Braid Finance will then compare from 120+ finance products on your behalf matching you with the lender that will meet your needs. This way you get to protect your credit score and avoid unnecessary inquiries on your credit file. Your application is then submitted and recommended for approval. Once approved, we organize an invoice and prepare finance contracts for settlement.
Some of the benefits of Hire Purchase include;