Finance lease or hire purchase?

For many businesses, choosing between a hire purchase and a finance lease comes down to financials and accounting. With hire purchase, you normally have to pay the VAT up front, whereas with a finance lease you can spread the cost of VAT over the monthly payments.

  • Some companies choose hire purchase because the asset shows on their balance sheet
  • Others would prefer to show an asset as an operating cost and offset rentals against profit, and so would choose a finance lease
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