Business finance
Discussion
Quick question if I may, raising some business finance to purchase equipment for hire from an overseas company, approx. 30k.
Option given is hire purchase or a lease scheme. HP I stump up the VAT. They advise lease taken by 90% of customers but my brain says HP for a limited co. Opinions before I speak to the accountant on Monday please? Also, 4.5% flat, no director guarantee, reasonable? I’m crap at working out APR..
Option given is hire purchase or a lease scheme. HP I stump up the VAT. They advise lease taken by 90% of customers but my brain says HP for a limited co. Opinions before I speak to the accountant on Monday please? Also, 4.5% flat, no director guarantee, reasonable? I’m crap at working out APR..
Your accountant will be able to advise the best option for tax efficiency between HP and Lease. My thinking would be that if you intend to keep the equipment then do HP, pay the VAT upfront and reclaim in next VAT quarter.
Rate wise - 4.5% flat is not unreasonable, depending on document fees that would equate to around 9% APR equivalent (although it won't show a rate on a limited company unregulated agreement). May get cheaper by looking around - director guarantee would be dependant on the strength of the company, and you have the issue of the invoicing trail coming from an offshore company. If your lender is already taking this into account then I think the deal is reasonable.
Rate wise - 4.5% flat is not unreasonable, depending on document fees that would equate to around 9% APR equivalent (although it won't show a rate on a limited company unregulated agreement). May get cheaper by looking around - director guarantee would be dependant on the strength of the company, and you have the issue of the invoicing trail coming from an offshore company. If your lender is already taking this into account then I think the deal is reasonable.
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