At PJ Financial Solutions we can offer a range of products
Hire Purchase
All the benefits of ownership on day 1, with a payment plan to suit you. This is an arrangement that give the lessees an option to buy the asset from the lessor at the end of the period, provided the lessee has kept to the terms of the agreement. Hire Purchase accounts for around 50% of the UK leasing market by value. Although there is not an obligation to take up the option to purchase, there is often a bargain option to purchase so it is likely to be exercised.
Finance Lease
For lease accounting under IAS 17, a lease that transfers substantially all of the 'risks and rewards' of ownership of an asset from the lessor to the lessee. This applies, for example, if ownership of the asset wil transfer at the end of the lease, of there is a bargain option to purchase, or if the lease can be extended at a rate below the market level (Secondary Period Rentals). Under IAS 17 finance leases are reported on the balance sheet of the lessee.
Operating Lease
A lease where the lessor retains the risk and rewards of owning the asset. According to IAS 17 indicators that a lease is an operating rather than finance lease include the lease term being for less than the major part of the economic life of the asset, the lessee not having any option to purchase or a bargain purchase option, and the present value of the lease payment being less than the value of the asset. Generally this option is exercised by larger firms running multiple assets on more of a 'fleet' policy/term.
Loans
An unsecured loan to a customer for products that cannot be financed. Typical uses are improvements to buildings/yards on farm, workshop facilities and 'comfort facilities' for larger operations with multiple employees. Generally funders charge a premium for this product but facilitates the requirements for customers as necessary.
Livestock
An unsecured loan to a customer for products that cannot be financed on HP or Lease options. Typical uses are improvements to buildings/yards on farm, additional livestock requirements, workshop facilities and 'comfort facilities' for larger operations with multiple employees. This product often comes at a premium, but each proposal is dealt with individually, on a case by case basis.
Refinance
Replacing an existing finance agreement with another for the same equipment. This may be done to extend the term of a lease, thereby reducing the payment amounts. This can be done on machines which are unencumbered or with remaining finance left on.
Contract Hire
A lease agreement, typically for cars, which is bundled with services. For company car fleets the service might include maintenance, insurance, replacement vehicles and fleet administration. As it is a hire agreement, the assets are returned to the lessor at the end of the agreed period. For car fleets there will typically still be a substantial residual value, making the accuracy of forecasting used car prices critical to contract hire pricing and profitability.