A finance lease, also known as a capital lease, is a type of lease agreement used for financing assets, such as technology, machinery, furniture and equipment. In a finance lease, the lessor (the one providing the financing) retains ownership of the asset and the lessee (the one using the asset) makes periodic rental payments over the term of the lease.
Under a finance lease, the lessee has the right to use the asset for the duration of the lease but does not have the right to sell or transfer ownership of the asset. At the end of the lease, the lessee may have the option to purchase the asset for a pre-agreed price or return it to the lessor.
There are several reasons why an organisation would use finance lease to invest in assets, including:
By leasing assets you will pay a fixed interest rate during the term of the lease which will increase the overall cost of the assets.
We will only ever arrange finance agreements that are affordable and enhance your financial strategy, but in the unlikely event that you cannot keep up with repayments on your lease, you may lose the asset.
It is important to carefully consider the terms and conditions of the finance lease agreement to take full advantage of the benefits of finance leasing and minimise any potential risks.
Finance leases and hire purchases are both great financing options, but there are some key differences between the two:
Click here for more information on hire purchase.
At Bluestone, we understand that navigating commercial finance options can be a complex process. That's why we're here to support you every step of the way.
Our team of asset finance experts has years of experience helping organisations like yours secure the funding they need, and we'll work closely with you to understand your needs and goals.
We can secure competitive rates, flexible terms, and fast approval times, so you get the funding you need to grow your organisation. Plus, we'll guide you through the entire process, ensuring that you understand the terms and conditions so you can make an informed decision.
Contact us today to get started.
A finance lease is a type of leasing arrangement in which the lessor (the finance company) purchases the asset and then leases it to the lessee (the organisation) for an agreed-upon period of time. At the end of the lease term, the organisation may have the option to purchase the asset for a pre-determined amount or return it to the finance company. A finance lease differs from other financing options in that it provides organisations with the use of the asset without the responsibility of owning it outright.
A finance lease can help a business acquire the assets it needs to grow and succeed by providing access to the latest equipment, vehicles, or other assets without the need for a large upfront capital outlay. This can help businesses conserve their cash and maintain a strong financial position.
The types of assets that can be leased through a finance lease vary, but they typically include equipment, vehicles, and other capital assets that a business needs to operate. The process for acquiring a lease typically involves filling out an application, providing financial information, and submitting a credit check.
The eligibility requirements for finance leases vary depending on the finance company, but they may include minimum credit scores, revenue thresholds, and other financial criteria.
The typical repayment terms for finance leases vary depending on the finance company, the asset being leased, and the terms of the lease agreement. Repayment terms may range from several months to several years. Compared to other financing options, finance leases typically have lower monthly payments and may provide more flexible repayment terms.
There may be fees associated with finance leases, such as application fees, maintenance fees, and termination fees.