8. Leasing and asset finance
Leasing or renting assets (eg machinery or office equipment) can save you the initial costs of buying them outright.
Advantages
Advantages include:
- you’ll have access to a high standard of equipment that you might not have been able to afford otherwise
- interest rates on monthly instalments are usually fixed
- it’s a less risky alternative to a secured bank loan – if you can’t make payments you’ll lose the asset but not, for example, your home
- the leasing company carries the risks if the equipment breaks down
- as long as you make regular repayments for the period of the lease, the agreement can’t be cancelled
- it’s widely available
Disadvantages
Disadvantages include:
- you can’t claim capital allowances on a leased asset if the lease period is less than 5 years (or 7 years in some cases)
- it can be more expensive than buying the asset outright
- some long-term contracts can be difficult to cancel early
- you may have to pay a deposit or make some payments in advance
Find funding
You can look for either:
- private finance providers (eg banks)
- public funding (eg government schemes)
