Benefits for you
SFM leasing plan
The tax efficient way to finance your new purchase
SFM offers a simple and tax efficient method of financing equipment for your business, without the complication of interfering with your bank credit line and has many advantages over cash purchase or HP. By using SFM Leasing Plan you will enjoy a collection of benefits including spreading the cost of your purchase and not needing an upfront payment for your furniture. Leasing gives you
all the benefits of ownership without disrupting your cash flow.
Rental Versus Purchase
When you purchase an asset by either 'bank cash' or your own cash reserves, effectively you are out of pocket for several years. There is no logical reason in paying 100% of the equipment cost on day one when the income generated or benefit gained by your business will be spread over a period of years.
As you can see from the finance calculator, the cost of leasing your equipment could be less than the cost of paying cash depending on your circumstances.
We recommend that you discuss this with your accountant to make sure that that your business receive maximum benefit from a lease agreement.
All figures exclude VAT and are strictly subject to status. Tax relief illustration assumes 21% tax rate and depreciation policy in line with lease term. Tax relief will vary depending on your individual circumstances or may not apply at all if your corporation does not pay tax. E&OE.
Frequently Asked Questions
Q. What is a lease exactly?
A. A tax efficient borrowing facility specially designed for businesses acquiring furniture and equipment. The finance company buy the equipment on behalf of the customer and then lease it back to them over an agreed term.
Q. What can I use SFM Leasing for?
A. Any machine which is over the value of £1000 plus vat
Q. Why is leasing so tax efficient?
A. Every lease payment is 100% allowable as a tax-deductible expense, therefore reducing the real cost of your purchase. A cash or loan purchase will only allow a small percentage write off in the first year, reducing each year thereafter.
Q. Is borrowing from a bank cheaper?
A. Initially payments are probably lower, but over the course of the lease the greater tax savings will mean the lease compares favourably with a bank loan. Depending on your circumstances it may even be cheaper to lease.
Q. If bank finance and leasing finance are similar in cost in the long run, why shouldn't I just go with my bank?
A. Bank lending is often secured on your personal or business assets, or both. Leasing is unsecured. Also, bank loans and overdrafts can be repayable on demand - check the small print. Providing rental payments are paid on time, our facility is fixed until the term ends.
Q. What is required to qualify for a lease?
A. A simple application can be done over the telephone. Accounts may be required dependent on the value.
Q. How will leasing benefit my business and me?
A. Lease finance is a convenient and comprehensive method of fitting out a shop of factory with minimal capital outlay, freeing financial resources for development elsewhere.
Q. Do leasing rates fluctuate like interest rates?
A. No, Leasing rates are fixed and do not vary with bank interest rate charges, enabling you to accurately plan ahead with cash flows and budgets.
Q. Can I apply for leasing if I am a new business?
A. Yes, new businesses are considered, additional information may be required.
Q. Is there a minimum value?
A. Yes, the minimum value is £1000.00 ex VAT.
Q. What is the repayment period?
A. The repayment period is normally 36 months although 12, 24, 48 and 60 months are available
Q. Can my machine be upgraded during the term?
A. Yes, you build up equity in a lease that can be utilised to add or upgrade equipment if required.
Q. What happens to the equipment at the end of the lease term?
A. Providing the contract has not been broken we can offer uninterrupted possession of the equipment. Title of goods can be transferred via a third party for a nominal payment agreed in advance.
