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Lease Finance · The Basics

The Lease Finance 100.
The Basics

Focus: Definitions, core concepts, and suitability.

16+Questions
100%Expert Answers
FCARegulated
How is VAT applied to lease finance payments?
TL;DR Understanding how is VAT applied to lease finance payments in the UK is crucial for budgeting. We break down the rules for different lease types, VAT recovery, and HMRC compliance.
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Can lease finance payments be deducted from taxable income?
TL;DR UK businesses often ask if lease finance payments can be deducted from taxable income. We detail the HMRC rules for operational and finance leases, clarifying deductible amounts and VAT implications.
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How does VAT work on lease finance payments?
TL;DR Understand how VAT works on lease finance payments in the UK. Learn the rules for reclaiming input VAT on Hire Purchase vs. Contract Hire agreements.
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Are lease finance payments fixed or variable?
TL;DR Are lease finance payments fixed or variable? Learn how UK finance and operating leases determine payment structures. Understand interest rate risk, rate variations, and why most leases are structured to be predictable.
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Can a business lose the leased asset if it defaults on payments?
TL;DR If a UK business defaults on asset lease or hire purchase payments, the asset is typically at risk of repossession. Learn about default consequences and legal remedies.
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What happens if lease finance payments are missed?
TL;DR Missing lease finance payments can lead to late fees, credit score damage, and asset repossession. Learn about the process and how to manage arrears effectively.
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Are there exit fees in lease finance agreements?
TL;DR Understanding exit fees in UK lease finance agreements is crucial. We explain Early Repayment Charges (ERCs), settlement figures, and how early termination affects your contract.
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What is a debt-service coverage ratio (DSCR), and why is it important?
TL;DR The Debt Service Coverage Ratio (DSCR) is a critical metric used by UK lenders to assess a borrower’s ability to repay debt from income. Learn how it works, how to calculate it, and why it is vital for property finance applications.
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How does lease finance work for heavy machinery?
TL;DR Discover how lease finance works for heavy machinery in the UK. We cover the main types—Hire Purchase and Lease Agreements—benefits, risks, tax implications, and application processes.
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How does business vehicle lease finance work?
TL;DR Learn how business vehicle lease finance works, covering contract hire, finance lease, VAT implications, and key benefits for UK companies needing transport assets.
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What types of commercial vehicles qualify for lease finance?
TL;DR Discover what types of commercial vehicles qualify for lease finance in the UK, from standard vans and trucks to specialised heavy machinery. Learn about the criteria and benefits.
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How does lease finance handle asset maintenance and repairs?
TL;DR Learn how lease finance handle asset maintenance and repairs in the UK. Understand your responsibilities, maintenance packages, and the impact on your business.
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What are the tax implications of leasing versus purchasing assets?
TL;DR Understand the UK tax implications of business asset finance. Compare Capital Allowances (purchasing) versus operating expenses (leasing) for HMRC compliance and cash flow planning.
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What are the advantages of lease finance in logistics?
TL;DR Discover the core advantages of using lease finance for logistics operations in the UK. Learn how leasing improves cash flow, aids budgeting, and ensures access to essential, up-to-date equipment.
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How can lease finance support sustainable business practices?
TL;DR Lease finance can drive sustainability by funding energy-efficient assets, promoting the circular economy, and reducing upfront capital expenditure for businesses pursuing green goals.
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How does lease finance benefit the healthcare industry?
TL;DR Lease finance is vital for UK healthcare providers seeking modern equipment without large upfront costs. Discover the financial, operational, and tax benefits for your practice.
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Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status. We may receive commissions that will vary depending on the lender, product, or other permissable factors. The nature of any commission will be confirmed to you before you proceed.

More than 50% of borrowers receive offers better than our representative examples

The %APR rate you will be offered is dependent on your personal circumstances.

Mortgages and Remortgages

Representative example

Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

Secured / Second Charge Loans

Representative example

Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

Unsecured Loans

Representative example

Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

Authorised and regulated by the Financial Conduct Authority – Number 681423
The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

Website www.promisemoney.co.uk