What are the advantages of Hire Purchase?
Spread the cost
Hire Purchase enables you to spread the cost of acquiring an asset over an extended period, typically ranging from one to five years. This makes it easier to manage cash flow and allocate funds to other areas of the business.
Immediate use of the asset
Hire Purchase allows businesses to use and benefit from the asset immediately after the agreement is signed. This can be particularly advantageous when the asset is essential for daily operations or revenue generation.
One of the significant advantages of Hire Purchase is that it ultimately leads to ownership of the asset. The buyer pays for the asset in regular instalments over the agreed-upon period, and once all payments are made, they become the outright owner of the asset.
The repayment structure of Hire Purchase typically involves fixed monthly payments over the duration of the agreement. This allows you to plan cash flow and budgets effectively, as you know the exact amount you need to pay each month without worrying about fluctuations in interest rates.