What if you could save money by leasing your machinery and still own the equipment at the end of the lease?
When you think of finance you may be of the opinion that although a useful way to spread cost, you’ll have to pay a premium for the convenience. This is just one of the many preconceptions you might have when deciding on lease vs buy. We’ve teamed up with experienced finance provider Tower Leasing to bring you a flexible payment option which could help you to keep up with the latest innovations, make budgeting easy and actually cost less than the price of the machinery.
If you’re a profit making business you’ll know that a corporation tax of 19% is applied to your profit at the end of each financial year. For every lease rental paid, your company is able to claim 19% in tax relief against the corporation tax. So your business can keep the cash rather than paying it to the HMRC.
Example based on a machinery purchase worth £7,500 ex VAT.
|Year||Capital Allowance||Tax Relief|
|1||12 rentals of £252.08||Less 19% = £574.74|
|2||12 rentals of £252.08||Less 19% = £574.74|
|3||12 rentals of £252.08||Less 19% = £574.74|
Tax Relief: £1,724.22
Once you take away the tax saving, the overall cost of leasing the machinery is £7350.66. That’s less than the cost of the equipment in the first place.
Upgrade outdated equipment
Another great reason to lease vs buy are the upgrade opportunities. Just like a mobile phone contract, you can choose to upgrade your machine at the end of the lease. Today’s rate of innovation means that machinery is often outdated only a few months after purchase. You can choose to send the old machine back and swap it for the latest model. If you decide there’s no better machine on the market, one final monthly payment and it’s yours!
Return on Investment
Leasing gives you the opportunity to see a return on your investment before you have even paid for it. Let the machinery pay for itself. Also, with no large outlays you can invest your capital elsewhere to generate extra income.
Make budgeting easy
In most cases a lease is based on monthly payments which stay the same throughout the lease. This helps to forecast expenses and budget accordingly.
When weighing up the pros and cons of lease vs buy, you may think it’s easier to buy out right, but the lease process is simple. Chat to a member of our knowledgeable Business Services team about the equipment you would like to buy. We’ll send the details to Tower Leasing and they’ll send you a lease quote clearly outlining set monthly or quarterly rental payments over a 2, 3, 4 or 5 year period. If you decide to go ahead, Tower will clear your business for credit and send you a lease agreement. Once Tower receive your signed lease agreement your order will be processed and your lease activated. Finally, Axminster will be in touch to arrange a convenient delivery day with you.
Keil Jones from Tower Leasing talks to us in more detail about the benefits of leasing.