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Also known as 'leasing', a finance lease is very similar to renting the equipment, in return for payments which are usually offset against taxable profit. The range for a finance lease is normally between one and five years and is designed to last until the equipment expires - although you can renew and continue to 'lease' it. Finance leasing provides flexibility and freedom - you don't have responsibility for something that you do not own.
Also known as a Lease Purchase, a Hire Purchase is very similar to finance leasing, except once you get to the end of the 1-5 years, instead of handing back the equipment, you own it. It allows you to spread the cost of purchasing equipment, which is ideal as long as the well-being of the assets is maintained and looked after.
Contract hire is very useful for vehicles, whether you're looking to purchase a van or more specific equipment - such as a tractor or a digger. The payment methods are made on the value of the asset (vehicle) and are spread over a specific term. Repayments are based on the asset value and the costs are worked out over the length of the agreement.
This type of asset finance is a good match for businesses that rely heavily on the use of technology. If you use an operating lease, your payments only last until the expiry date has been reached. Once the asset stops being useful, you pay the difference of the original price and the residual value, once the agreement has expired.
Refinancing allows you to revise your payment schedule when repaying your debt. It also enables you to renew your loan, therefore replacing an old loan with a new one. Refinancing is useful if your credit ratings are poor. For example, instead of using several credit cards with different interest rates, it will allow a loan with the same amount, which will then drop the interest down, as it is only one loan you are paying back.