Run a small business and need new equipment? The cost of purchasing specialist equipment such as machine tools outright can be prohibitively expensive, but there is another solution available.
If you’re one of the growing number of SMEs (small to medium sized enterprises) operating in the UK, you could be making use of machine tool finance to acquire the equipment you need. Thousands of SMEs across the UK manufacturing industry make use of hire purchase on a regular basis, and it has proven to be the most popular form of finance for machine tools.
Understanding hire purchase
Machine tool finance from specialists such as Prolease is a simple concept to understand. It involves making payments for equipment in instalments, spreading the cost and making machine tools and other items more affordable. You, the business owner or sole trader, enters into a hire purchase contract and agrees to make so many payments over a set period of time. At the end of this period, when all the payments have been made, the contract is complete. Ownership is transferred to you at the end of the contract, and you will then own the piece of equipment outright.
Making use of machine tools finance contracts enables businesses, contractors and sole traders to start using the equipment they need right away. There’s no need to wait years and save up to afford the equipment, by which time you may need to buy something else. Crucially, this means using it to bring in more income. This can be used for the instalment payments, so that the equipment pays for itself.
Other benefits of hire purchase include:
- No risk to other assets – unlike some loans where the agreement is secured on your assets, hire purchase focuses solely on the piece of equipment being financed.
- Minimising disruption to manufacturing – every manufacturer has tight deadlines to meet, and broken equipment or the lack of a vital new piece of equipment can seriously hold things up. This costs the manufacturer in time, money and customer approval, but not if they make use of hire purchase to acquire essential equipment quickly.
- Easy budgeting – hire purchase agreements tend to have fixed instalment payments, which makes it incredibly easy for businesses and sole traders to budget and manage their finances. This is very different to some loan agreements, the repayments of which can be subject to fluctuating interest rates.
Cashflow and your business
For small businesses, it is crucial to keep a close eye on cashflow. Why use machine tools finance rather than purchasing equipment outright? Machine tools can be very expensive to buy, making them a sizeable investment for businesses. If you don’t have the cash outright or to find it would put a strain on other parts of your business or credit arrangements, hire purchase is the ideal solution. It keeps your money where it needs to be – in the bank ready to pay suppliers, staff, rent on premises or other expenses that are essential for keeping your business going. Each instalment payment is a fraction of what buying the equipment would cost if you had to pay it all at once, so it’s much more affordable.
Acquiring new equipment with Prolease Finance
At Prolease Finance, we have decades of industry experience in providing machine tools finance to all kinds of businesses. Our friendly team specialises in helping small and medium sized enterprises (SMEs) expand their operations and acquire the equipment they need through lease agreements with terms that suit them.
With many types of machine tools, the machinery will retain value and performance for a long time. Prolease has provided hire purchase finance for machine tools that were manufactured in the 1970’s. The finance term can be extended for quality new machine tools too.
Machine tools are also suitable for refinance by way of lease finance or hire purchase finance and over periods of up to 5 years.
To find out more about hire purchase and the types of machine tools and equipment Prolease can finance, get in touch with the team today. Whatever your requirements, we’re confident we can help. Drop us an email at firstname.lastname@example.org or call 01432 347 770 for a friendly chat.