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Commercial Leasing & Finance

Investing in quality catering equipment and supplies is the key to success however this can be a pricey affair. When the budget is tight or you simply want to free up some essential funds, commercial leasing is a great option.

Here we outline the core details of leasing commercial catering equipment and answer some frequently asked questions. 

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What is a lease agreement?

Is a lease the same as a commercial rental?

What is sale and leaseback?

How can leasing catering equipment and supplies help my business?

Can I lease any type of catering equipment?

Are there any tax benefits from leasing?

Can I still apply for a lease even with a poor credit rating?

Do I need to pay a large down payment?

How long does a lease application take?

What about payments?

What happens at the end of the lease period?

Who takes care of insurance?

Who is responsible for service and maintenance?

Example Table of Leasing Costs 

Here we show examples of leasing costs, based on the duration of the lease in relation to the total cost of equipment.

  2 Years 3 Years 4 Years 5 Years
£1,000.00 Monthly payments £51.00 £36.00 £28.00 £23.50
Total £966.96* £1023.84* £1061.76* £1113.90*
£2,000.00 Monthly payments £102.00 £72.00 £56.00 £47.00
Total £1933.92* £2,047.68* £2,123.52* £2,227.80*
£3,000.00 Monthly payments £153.00 £108.00 £84.00 £70.50
Total £2900.88* £3071.52* £3185.28* £3341.70*
£4,000.00 Monthly payments £204.00 £144.00 £112.00 £94.00
Total £3867.84* £4095.36* £4247.04* £4455.60*

 

*All payments shown are based on businesses trading in excess of 3 years and are subject to status and VAT.  These repayment  values are based on 21% tax relief (tax relief shown is for illustration purposes only). For further information on how tax relief can benefit your business contact our sales team; alternatively, your accountant will be able to discuss any advantages.

What is a lease agreement?

Leasing is an agreement which takes place between you (the lessee) and a finance company (the lessor). The total cost of equipment is covered by the lessor allowing you to take receipt of your order and put it to use whilst making fixed monthly repayments. This also frees working capital allowing your business better cash flow. 

Is a lease the same as a commercial rental?

No, all 24/7 Catering Supplies leasing agreements are made on a ‘lease to buy’ basis meaning that once all repayments have been made, the equipment is the property of your business. Rentals are when equipment is hired and given back at the end of the agreed period; ownership never lies with the renter.  

What is sale and leaseback?

This term is used when a business sells property to a buyer, this buyer then immediately leasing the property back to the seller. It’s a great way to free up capital that is tied up in an asset whilst still being able to utilise the equipment. 

How can leasing catering equipment and supplies help my business?

Leasing has proven a popular method for obtaining catering equipment whilst spreading the monthly cost and freeing up funds for use in other areas. Rather than pay for 3 – 4 years of use upfront, as when purchasing outright, you can pay over the useable life of the equipment. This option allows higher priced items to be invested in; units that might otherwise be unobtainable when buying outright.

Can I lease any type of catering equipment?

Commercial leasing is available across all equipment meaning that you can invest in the best without the hefty up front cost. Whatever you’re looking for you can place on a leasing scheme, that’s anything from combination ovens and fryers to espresso machines and water boilers. As long as the total amount of your order exceeds £1000 excluding VAT, you can obtain any equipment that will benefit your business. 

Are there any tax benefits from leasing?

All leasing payments are 100% tax deductible against taxable profits. Your business will benefit from tax relief throughout the agreed term of the lease agreement.

Can I still apply for a lease even with a poor credit rating?

Commercial ‘lease to buy’ applications are considered on more than just your credit rating. Whilst good credit will definitely speed up the application process, it doesn’t mean that these businesses are the only ones that can take advantage of a leasing deal. The lessor/underwriters will also be interested in areas such as the length of time that your business has been trading, whether you are a home owner, the equipment that you’re purchasing and the current performance of your business. All existing credit including overdrafts and loan are protected.

Do I need to pay a large down payment?

Generally a charge equivalent to the first 1 – 3 months of rental repayments will be required to start the lease; a lot less than purchasing the equipment outright.  The deposit is generally negotiable. 

How long does a lease application take?

The length of time from lease application to finalisation will vary, typically between 1 – 5 days depending on many factors, such as the type of business, the number of years trading and how quickly paperwork is returned. 24/7 Catering Supplies offer a lease to basket service which aims to give a leasing decision within minutes and with e-signatory also on offer in some cases, whereby forms can be signed online, the whole process can be completed in a shorter timeframe. Even in cases such as these, don’t expect your equipment to be delivered the following day. Paperwork will still need filling out and terms agreed on so don’t expect instantaneous results.  

What about payments?

Flexible payment schemes are available ensuring that all individual business requirements are catered for. With fixed rates throughout the term of the lease, your payments will remain stable. Making your repayments is simple; all fixed and regular payments are made by Direct Debit leaving no monthly hassle. 

What happens at the end of the lease period?

When all repayments have been made and the agreed terms of the lease have been fulfilled, the equipment becomes the property of your business. 

Who takes care of insurance?

For the protection of all parties involved, we, as the legal owners during the period of lease, require that all equipment be insured by you, the lessee. 

Who is responsible for service and maintenance?

During the lease period, you will receive all of the privileges and benefits of being a buyer. Whilst this includes warranties and support, it also means that any service and maintenance costs will fall to you to cover.

  

On all product pages we include an estimate of leasing repayments over a 1 - 5 year period. This acts as a guideline only and will vary depending on the status and circumstances of each individual business.

Leasing agreements are provided by a third party finance company. As with all agreements, terms and conditions should be read and understood prior to finalisation.

For further information regarding leasing options please contact our sales team.

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