Cleaning equipment finance

There are a few options to explore if you want to finance cleaning equipment, as we explain below:

Leasing 

One of the most common cleaning equipment finance options is leasing. This enables you to rent the equipment from a leasing firm over a period of around one to five years (depending on the provider). During that time, you make regular fixed payments which can make it easier to budget. 

You’ll be able to use the equipment as if it were your own during the lease term, and at the end of the lease period you can decide whether you want to extend the lease, return the equipment, or upgrade it to something more modern. There’s also usually the option to pay extra to buy it outright if you prefer to keep it. 

Leasing is also tax efficient as you can offset each payment as a taxable business expense. Speak to your accountant as they will be able to help you with this. 

To qualify for leasing, you will usually need to have been trading for at least two years and some providers might require you to have a good credit history. 

Hire purchase

Some providers might also offer hire purchase. This usually requires you to pay an initial deposit for the equipment and then the remaining cost is split into monthly instalments over a set term, and interest is added. At the end of the term, you will own the equipment outright – there are no options to return it or upgrade it. 

The equipment will usually be an asset on your balance sheet and any outstanding amount you owe will appear as a liability until you’ve repaid it. The company you hire the equipment from is usually responsible for its upkeep. 

Company finance

Some companies will also offer finance options that work in a similar way to a standard business loan. You effectively buy the equipment with a loan and then pay the amount owed in monthly instalments over a period of one to five years.  

Depending on the provider, you might be able to get an interest-free deal for a shorter period of time (typically up to 24 months), or you might have to pay interest on your monthly repayments. Once you’ve made your final repayment, the equipment is yours to keep.  

If you are looking into asset finance as an option, it’s important to check whether there’s a minimum purchase amount and whether you need to put down an initial deposit first. Also check if you’d incur an early repayment charge if you repaid the loan early.

When comparing your finance options and deciding which one works best for your cleaning business, there are a number of different factors you’ll need to consider. Leasing, for example, offers the most flexibility and could be the best choice if you’d like the option of being able to upgrade your equipment every few years. On the other hand, if you know you want to own the equipment outright at the end of the term, you might prefer hire purchase or look for a company that offers its own finance agreements. 

You will also need to compare interest rates, as well as consider whether you’ll be responsible for maintenance and insurance costs, or whether that will be the responsibility of the lender.