WHERE LOCAL BUSINESS GROWS

Leasing



Overview
 

Your business might need to acquire assets (like furniture, computer equipment or company vehicles) or capital equipment, such as plant or machinery.

You could buy your assets or equipment outright, or you might decide to rent them instead. This allows you to get the equipment and assets you need that you might otherwise be unable to afford. It can also free up working capital for use in other areas of your business and save you from having to take out a large loan to buy equipment outright.

You may want to lease or rent equipment that has high maintenance costs, can quickly become outdated, or is only used occasionally.

There are three main types of lease agreement – finance leasing, operating leasing and contract hire – and you should carefully consider which one is right for your business.

The process
 

There are different kinds of lease arrangement. You should consider them all to see which is best suited to your business and the asset that you are acquiring.

Finance leasing

Finance leasing is a long-term lease over the expected life of the equipment, usually 3 years or more, after which you pay a nominal rent or can sell or scrap the equipment - the leasing company will not want it any more. Although you don't own the equipment, you're responsible for maintaining and insuring it.

You must show the leased asset on your balance sheet as a capital iteman item that has been bought by the company.

Leases of over 7 years, and in some cases over 5 years, are known as 'long funding leases'. You can claim capital allowances under long funding leases as if you had bought the asset outright.

Operating leasing

With operating leasing, the leasing company is responsible for maintenance and insurance, and they will take the asset back at the end of the lease. You don’t have the show the asset on your balance sheet.

Operating licensing is useful if you don’t need the equipment for its entire working life.

Contract hire

With contract hire, the leasing company takes some responsibility for management and maintenance, such as repairs and servicing. You don’t need to show the asset on your balance sheet. Contract hire is often used for company cars.

Pros and cons
 

Pros

  • you don't have to pay the full cost of the asset up front, so you don't use up your cash or have to borrow money
  • you have access to a higher standard of equipment, which might be too expensive for you to buy outright
  • you pay for the asset over the fixed period of time that you use it, which helps you budget for the future
  • interest rates on monthly rental costs are usually fixed, so it's easier to forecast cashflow
  • you can spread the cost over a longer period of time and match payments to your income
  • you can usually deduct the full cost of lease rentals from your taxable income
  • if you use an operating lease or contract hire, you may not have to worry about maintenance
  • the leasing company carries the risks if the equipment breaks down
  • the leasing company can usually get better deals on price than a small business could and will have superior product knowledge
  • on ‘long funding leases’ - finance leases over 5 (or sometimes 7) years - you can claim capital allowances on the cost of the assets
  • if you need to upgrade or replace the equipment, you can just make a small adjustment to your regular payment rather than invest a lump sum upfront
Cons
  • you can't claim capital allowances on the leased assets if the lease period is for less than 5 (or sometimes 7) years
  • you may have to put down a deposit or make some payments in advance
  • it can work out to be more expensive than if you buy the assets outright
  • your business can be locked into inflexible agreements, which may be difficult to terminate
  • leasing agreements can be more complex to manage than buying outright and may add to your administration
  • your business normally has to be VAT-registered to take out a leasing agreement
  • when you lease an asset you don't own it, although you may be allowed to buy it at the end of the agreement

Common mistakes
 

Leasing is most useful for equipment and assets that you can’t afford to buy.

You may want to buy equipment or assets rather than lease them if you don’t want to enter into a long-term leasing agreement or want to keep your long-term costs down – it's often more expensive to lease equipment or assets than to buy them outright.

Funding sources
 

The types of companies that offer hire purchase and leasing contracts include:

  • subsidiaries of major UK banks
  • providers owned by manufacturers, such as car manufacturers
  • non-UK banks
  • independent finance houses
  • equipment suppliers
  • members of the Finance and Leasing Association (FLA)
When assessing the most appropriate leasing company to use, make sure that:
  • the provider is a reputable company, preferably a member of the FLA
  • your contract corresponds with any verbal or written quotations
  • the length of leasing agreement covers the period that you need the asset for
  • you are aware of any financial penalties that may be incurred if you wish to end the agreement early
  • the equipment you are leasing is new
  • you have read the contract carefully before signing it - checking the total cost, the period of hire, notice periods, the contract terms and conditions and charges

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News

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Yorkshire businesses get behind £10k fundraising campaign

Tuesday 04 April 2017

As preparations for the charity football initiative ‘The Match 2017’ continue to gain momentum, the latest supporters to get on board are Huddersfield-based businesses Magic Rock Brewing and Lindley Financial Management. The inaugural event, which will take place on Saturday 20th May at The MBI Shay Stadium in Halifax, will bring together footballing amateurs and Huddersfield Town legends, in a game that will help to raise much needed funds for Yorkshire Air Ambulance. Both firms have dug deep for the cause, and have each donated £500 in return for becoming an official shirt sponsor. With a running cost of £12,000 per day for the two yellow helicopters to remain active, the organisation relies entirely on donations to continue saving lives. And now further support is required to keep The Match proceeds growing, and help this initiative reach its £10,000 target. Magic Rock Brewing was founded by brothers Richard and Jonny Burhouse and inspired by brewing traditions and the US craft beer scene in particular. The award-winning and ever-growing company produces an innovative range of idiosyncratic beers in their 4,000sqft Tap Room, close to the town centre. When approached via social media and asked to get behind The Match, Richard says there was never any doubt about getting involved: “We are a community focused business, keen to support local initiatives wherever possible. We are aware of the excellent work the air ambulance does for the region, and wanted to do our bit.” Regular charity supporters Lindley Financial Management also had no qualms about signing up to help the event. The independent financial advisers, based in Brighouse, also support Pilgrim Bandits Charity, aiding soldier amputees injured in Iraq and Afghanistan. Commenting on The Match, director Mark Learmont, said: “I hope as many people as possible attend on May 20th. Nobody knows when they may need the help of the Yorkshire Air Ambulance – supporting them is vital and their services must be applauded.” Organiser, and founder of grassroots football specialists Coaches Club, Dave Learmont, adds: “I am so thankful that two local businesses have gone the extra mile to raise awareness and proceeds for this fantastic charity. 100% of all funds donated will go to Yorkshire Air Ambulance, and these shirt sponsorships put us well on our way to hitting our huge target.” But the search for sponsors isn’t over, with the players themselves now looking for individual support. For only £150, companies will secure their name and details on the official match website, alongside their logo on the programme. The players and Town legends are also appealing for members of the public to get on board and buy tickets. Available at £10 for adults and £5 for children, the aim is to provide a fun, low cost day out for all the family. Pre-match and half-time entertainment – as well as a couple of extra special guests – will be revealed over the coming weeks. All tickets must be purchased before the game, via justgiving.com/teams/coaches-club. Further information and updates about The Match and player sponsorship can be found at The Coaches Club website, and on Twitter @cccmatch.
Posted by Scriba PR
Vizulate becomes Approved Supplier on Digital Enterprise scheme

Friday 10 March 2017

Vizulate Digital is delighted to announce that we have been named as an approved supplier on the Leeds City Region Digital Enterprise scheme, which allows eligible small and medium sized businesses across Yorkshire to ‘Invest in Digital’. Running until March 2019, the Digital Enterprise scheme aims to support the growth and development of SMEs in the region through investment in digital skills and technology. Eligible businesses will be able to apply for 40% funding towards the cost of digital projects including digital marketing, social media, web design and development, e-commerce and more – up to a maximum of £5,000. The Digital Growth Vouchers could also fund part of the cost of technology upgrades such as IT and telecoms and, if approved, the business will then only have to cover the remaining 60% of the cost. The Digital Enterprise scheme is a partnership programme which is partly funded by the European Union (European Regional Development Fund), the West Yorkshire Combined Authority/Leeds city region Local Enterprise Partnership (LEP) and the 9 local authorities which form part of the Leeds city region – Leeds, Calderdale, Kirklees, Bradford, Selby, Craven, Harrogate, York and Wakefield. As approved suppliers on the Digital Enterprise scheme with over 10 years’ experience we are able to offer the full range of digital services including: Website Design & Development E-Commerce Digital Marketing Social Media Search Engine Optimisation (SEO) Online Advertising (Google AdWords, Facebook Ads etc.) Video & Animation Integrated Digital Solutions Web Hosting & Email Through our trusted partners we can also provide IT and telecoms solutions. We believe digital marketing represents the single biggest opportunity for businesses to achieve growth.
Posted by Vizulate Digital
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Events Posted

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Facebook Advertising Workshop
Thursday 27 April 2017, 09:30 - 12:30
Bridge House, 2 Woodhead Road, Holmfirth, HD9 6PX
£65 - 6 places
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Business Hub Live - Innovation and Research & Development
Wednesday 24 May 2017, 08:30 - 10:30
Firth Street, Huddersfield, HD1 3BD
Free Entry - 50 places
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