From €1,000 to €10m depending on provider (who may also set limits per asset or per business)
1-5 years typically
Monthly instalments vary according to the asset, your credit rating and your provider – you usually pay a deposit (e.g. 10%) and all the VAT upfront
Businesses wanting equipment without the upfront costs (including startups)
Hire purchase is a way for you to buy an asset by paying in instalments over a period of time, rather than paying upfront. With hire purchase, you legally own the asset after all the instalments have been paid, but in most agreements it will appear on your balance sheet from the start.
Hire purchase is a bit like making a purchase and paying in regular instalments, like you might do for a new kitchen or furniture for your home.
During the leasing period the provider owns the asset – and is therefore responsible for maintenance and insurance.
Your business legally takes ownership of the asset after all the instalments have been paid, but in most agreements the asset will appear on your balance sheet from the start of the agreement. You usually pay a 10% deposit and all the VAT upfront.
If you need access to equipment, you might want to look at other options. A finance lease is a similar long-term commitment but you won’t own the item at the end of term and the asset never appears on your balance sheet. You are however responsible for maintenance and insurance.
Another option is an operating lease.
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