Hire Purchase is arguably the simplest form of asset finance. This product enables the customer to hire an asset for an agreed period of time, for a payment of a fixed rental. At the conclusion of the agreement, the equipment can be purchased by the customer for a pre-agreed sum.
The main advantages of a Hire Purchase agreement are that the purchase improves the Company balance sheet. On top of this, with the product being a ‘purchase’, all of the VAT is paid and reclaimed at the outset.