Business Finance Lease

Business Finance Lease is a straightforward rental agreement that offers significant tax advantages, particularly if your business is VAT registered. Business Finance Lease is designed to make budgeting easier for your business.

With a 'Balloon**' style Finance Lease you can reduce your monthly rentals even further because the car's estimated resale value is taken into account when the rental payments are calculated. The estimated value is then offset to the end of the agreement, thereby reducing your rental payments. At the end of your lease agreement, you must sell the car to an unconnected third party.
With a Finance Lease your sales proceeds will first need to cover your outstanding 'balloon' payment and any balance will then be refunded to you. Any shortfall remaining from the 'balloon', however, will be your responsibility to settle.

Like Business Contract Hire for VAT registered businesses***, VAT is reclaimable on the rentals, based on 50% of the VAT on the capital element (assuming an element of private use) and 100% of the VAT for any maintenance charges.

Routine servicing and maintenance costs can be included for a small increase to the monthly rentals. All scheduled maintenance work will be carried out by the main dealer network, at a dealer of your choice. Maintenance** packages include replacement tyres (excluding punctures), batteries, exhausts and all parts that are subject to fair wear and tear.

It is important to stress that whilst you may benefit from the sale of your vehicle you could also be required to cover the potential shortfall. Finance Lease does not offer complete peace of mind and customers looking for no vehicle disposal issues would be better suited to Business Contract Hire.

Key Benefits** of Business Finance Lease or BFL:

• Low initial outlay from just 1 month's payment
• Flexible terms from 24 to 48 months
• Choice of rental period
• Ability to show the vehicle off your balance sheet
• More capital available for your business
• Improved cash flow
• You could benefit from the sale of the vehicle to a third party
• VAT reclaimable on the rentals***
• Optional monthly maintenance packages

** Subject to terms and conditions of the agreement.
*** VAT registered businesses*, VAT is reclaimable on the rentals, based on 50% of the VAT on the capital element (assuming an element of private use) and 100% of the VAT for any maintenance charges.