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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: