What is a Finance Lease?
Finance leases give businesses the option of borrowing an asset for a fixed period, rather than having to buy it outright. Not only will this overcome the cash flow implications of paying for a new piece of equipment or machinery up front, it also means the issue of asset depreciation is avoided.
Your business pays for the use of the asset through regular instalments, which helps with cash flow management. Meanwhile, to make the finance lease more affordable, the asset finance company claims the capital allowances on the asset.
At the end of the contract, you can either purchase the assets or the asset finance company will sell it, possibly giving your business a share of the proceeds.