Hire Purchase

Hire purchase is used by businesses and professional practices to purchase a wide range of equipment and machinery.

It offers a simple solution for spreading the capital cost of new or used equipment and machinery over a period of time and at the end of the agreement title automatically passes for a nominal fee.

Equipment Suitable for Hire Purchase

At TeleLease we can finance most items of new and used machinery and equipment on hire purchase including:

  • Dental equipment
  • Medical equipment
  • Scientific equipment
  • Veterinary equipment
  • Office equipment
  • Computers
  • Manufacturing machinery
  • Assembly lines
  • Forklift trucks
  • Construction plant
  • Commercial Vehicles

Deposits & Initial Payment for Hire Purchase

Typically you will have to pay the VAT on the cost of the equipment at the start of the agreement then pay monthly over the period of the loan.

For dentists and other healthcare related exempt businesses VAT is usually added to the advance and paid monthly.

Businesses less than three years old and with lower credit ratings may need to pay a deposit of anything from 10% to 40%, depending upon the asset.

Size of Loan

We have a minimum advance of £10000 plus VAT and no upper limit.

Period of Loan

The maximum loan period will be determined by the type of equipment or machinery you want to finance and the credit rating of your business.

We offer Hire Purchase over periods from two to seven years enabling the capital cost to be scheduled over the expected life of the asset.

Fixed or Variable Interest Rates

In most cases the interest you pay on a HP agreement will be fixed for the period of the loan.

For more expensive machinery we can arrange a variable rate agreement where the interest is linked to LIBOR or Bank of England Base Rate.

Balloon Payments

In some cases it’s possible to reduce the monthly repayment by deferring part of the cost to the end of the agreement.  Best suited to commercial vehicles, the balloon payment is usually paid from the disposal value of the asset.


For VAT registered businesses any VAT paid on a Hire Purchase agreement can be reclaimed in full providing the equipment or machinery is purchased for business use.

In some cases we can defer collecting VAT to coincide with your VAT reclaim date.

Income Tax/Corporation Tax

Equipment, machinery & commercial vehicles financed on hire purchase will usually qualify for 100% first year allowances via the Annual Investment Allowance.

The interest element of the agreement and non recoverable VAT (in the case of exempt businesses) can also be claimed as a business expense to reduce tax liability.

Accounting for Hire Purchase

Assets financed on a HP agreement should be capitalised on your company balance sheet and the outstanding repayments shown as a liability according to the period of the loan.

Hire Purchase or Lease Purchase?

The name Lease Purchase is slightly misleading and can cause a degree of confusion.  In reality, hire purchase and lease purchase are the same type of agreement.

Contact us today

Please call us today for an informal discussion or complete the following contact form and we will call you.

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    Call us today on 03300 580151



    3 Brindleyplace
    3 Brindleyplace
    Birmingham, United Kingdom
    B1 2JB
    B1 2JB