Personal contract purchase (PCP) is a popular way of financing a vehicle (usually a car that is up to 5 years old at the start of the agreement dependent on the lender). A guaranteed future value (GFV) is calculated for the end of the agreement.
The GFV is calculated based on the vehicles starting age, start mileage and projected future mileage across the term of the agreement.
At the end of the PCP agreement the user has 4 options:
Hire Purchase with balloon payment is similar to a PCP where an amount is deferred to the end of the agreement (known as a balloon). However, this amount is not guaranteed by the lender, there is no hand back option at the end of the term and the customer is liable to pay when it becomes due.
At the end of the Hire Purchase with balloon there are 3 options:
A Hire purchase agreement allows you pay for the car monthly over a fixed period (usually up to 60 months). Monthly payments are fixed paying down the cost down to £0. Once the last payment is made (including a nominal option to purchase fee) you take title to the car.
A balanced payments product offers a fixed monthly payment but is a variable rate product which tracks the Bank of England base rate or similar. As the suggested rate goes up or down over the period of the contract, so does the interest you pay at the end of the agreement.
You can have a balloon payment at the end of the term and any interest owed to you (if interest rates reduce) is taken off the balloon amount and if interest rates rise the amount of interest is added to the balloon amount or paid as credit to you if the product is a straight payment plan.
To qualify for a balanced payment product you can a Ltd company, partnership of 3 partners, funding over £25k for an individual using the vehicle for business use (via the business use exemption) or funding over £60,260 and using a High Net Worth Opt Out. (High Net Worth criteria is income of over £150k net in the last tax year and/or equity in assets of over £500k outside of the main residence.
The Finance Hut Ltd can discuss this product and the criteria with you.
A finance lease is a finance product for financing assets where they remain the property of the finance company and the customer (lessee) pays to hire the assets.
This is a perfect option for businesses that require assets but do not want to purchase them outright. Monthly payments appear on your balance sheet as a liability.
If you own a vehicle or an asset we can release equity using products like Hire Purchase, Hire Purchase with balloon and Balanced Payments. Usually up to 80% of the lenders valuation.
These funds can be used many different uses and can provide quick access to funds whilst still owning the assets.
Using our large panel of lenders and 40 years experience within the industry as an underwriter and in sales we can put together bespoke finance packages using products like overpayments, seasonal payments, vat deferrals and more.
We can work with your circumstances to put suitable packages together.
Obtaining capital quickly with payments spread over a fixed term (up to 60 months). The loan can used for purchasing an asset, investing in growth plans or cashflow.
A loan specific for Accountants, Solicitors, Lawyers, Dentists or Doctors etc. The use of the loan can be for VAT, Annual Tax, practice loans, Case funding, growth plans or cashflow.
Mortgages to commercial trading premises as an owner occupier or investment properties including Buy to Let portfolios for businesses and Private Individuals.
First time landlords and overseas nationals given our underwriting knowledge and our panel of lenders these customer profiles are not a problem.
