Cost
Because the loan is secured against an asset, the interest rate is usually lower than it is with a business loan. The rate will vary dependant on the sell-ability of the asset.
the low down
Is an Hire Purchase right for you?
Hire purchase is an iteration of asset finance that allows a business to purchase new assets, utilising the asset being purchased as collateral for the loan. It also can allow a business to inject cashflow by using existing assets in the business as collateral for a loan. Facilities can be as small as £1,000 and as big as £10,000,000.
Considerations for lenders are twofold:
Security: if the business were to fail, can the lender sell the asset to repay the loan
Serviceability: can the borrower afford the repayments on the loan
With regard to hire purchase and in particular, while making payments during the term, the business is hiring the asset, and the title of the asset changes to the business once all of the repayments have been made.
In most cases the lender will require an initial deposit – typically 10% of the purchase price and then a monthly instalment paid over 1-5 years and then a final payment. Since the finance is secured against an asset the interest rate is typically better than that of an unsecured loan.
At Sedulo Funding Solutions, we have access to the whole UK finance market and we make business finance easy.
Fancy booking a call (or meet-up) with our team of experts? We can get you a no-obligation quote.
Growth
This facility allows a business to acquire the assets needed to grow, without having to pay for the asset upfront.
Ownership
The business will own the asset at the end of the agreement meaning they will then drive greater margins.
Security
Minimal personal security is required due to the facility being secured predominantly against the asset.
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With access to over 150 lenders, we can help make your plans a reality.
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50k Unsecured Business Loan secured for an existing client
The funding will allow the business to increase their resources and take on more lucrative contracts.
Funding Stories
Sonny Wilson
Sedulo Funding Broker
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Recent deal
£215,000 Asset Finance deal for a large e-commerce business
The garden retailer needed to expand their fleet of vehicles with a number of brand-new vans.
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Carl Finlayson
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Recent deal
Asset Finance facility for a UPVC windows and doors installation business
The business required a new van to complete ongoing projects faster, whilst allowing the business to take on more projects.
Funding Stories
Sonny Wilson
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Our Answers To Your Questions
We’ve put together a list of common Business Loan FAQs. If there’s something you want to know and you can’t find the answer here, get in touch with our team of finance experts.
Repayment terms for Hire Purchase agreements can vary widely depending on the asset being financed and the needs of the business. Typical terms range from 1 to 5 years, but longer terms may be available for very expensive assets.
The costs associated with Hire Purchase include the interest charged on the amount financed and potentially a deposit or down payment. The interest rate and total cost will depend on factors such as the value of the asset, the length of the repayment term, and the creditworthiness of the business.
Yes, start-ups can use Hire Purchase to acquire essential assets without tying up their limited capital. However, start-ups may need to demonstrate their ability to meet the regular payments, and some finance providers might require a larger initial deposit or personal guarantees from the business owners.
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A Team Of Finance Experts, On Your Side
Whether you’re looking to obtain funding to take on the next stage of business growth or access working capital to cover costs, it’s important to have a team of experts on your side.
Our experienced funding team operates out of each city centre office in Manchester, Leeds, Liverpool, London and Birmingham. We’re available to meet face-to-face so that we can better understand your business and talk you through your funding options, or we can assist over the phone – whichever you’d prefer!
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