The Financial Conduct Authority (FCA) announced on 11 January 2024 that a review will be conducted in the vehicle finance market regarding Discretionary Commissions. We want to inform our customers that Anglo Scottish Asset Finance acts as a broker, not a lender, and if you believe you have been impacted by this issue, please contact your car finance lender. For further information, please click here

The Financial Conduct Authority (FCA) announced on 11 January 2024 that a review will be conducted

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Hire Purchase

Budgeting becomes simpler

Hire Purchase Agreements  

Hire purchase, sometimes simply referred to as HP, is a form of lease agreement that allows your business to spread the cost of an asset over the course of a pre-agreed payment plan.

For businesses looking to grow sustainably or retain a consistent cash flow, hire purchase agreements are a useful facility, enabling access to expensive machinery, vehicles or equipment without being forced to pay for the asset in one go.

If your business wishes to own the asset at the end of your payment plan, a hire purchase plan could be perfectly suited to your business needs. However, it’s crucial to understand the advantages and drawbacks of a hire purchase plan before making the choice.

Find out more about hire purchase here, or contact us to discuss your specific requirements and find out whether a hire purchase agreement is right for you.

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Need help? Call us on 0191 410 4776

What is hire purchase?

A hire purchase agreement allows your business to spread the cost of an expensive asset over an extended period. Unlike some other types of asset finance, such as contract hire, a hire purchase agreement enables your business to take ownership of the asset once the payment plan is completed.

Under a hire purchase agreement, you’ll pay an initial deposit for the asset, before paying a pre-agreed monthly rate until the outstanding balance for the asset has been paid off.

Some hire purchase agreements may include a contractual balloon instalment at the end of the plan, leaving a final, larger sum to be paid in order to bring your balance back to zero.

Interest rates for a hire purchase agreement will be pre-dictated at the beginning of the agreement, and can either be fixed or flexible in line with your company’s requirements

How does hire purchase work?

Hire purchase agreements typically involve an upfront deposit to secure your asset – this amount will depend on the value of your asset and the terms of your agreement.

Then, you’ll pay a monthly sum for a pre-agreed period, until you’ve paid off the entire balance of the asset.

At this point, you’ll be given the opportunity to take full ownership of the asset. If you wish to become the owner, the legal rights of the asset can be transferred over to you in exchange for a nominal fee.

In the event that you do not wish to take ownership at the end of the agreement, the equipment or vehicle will return to the leasing company.

Is hire purchase right for me?

Hire purchase is a useful facility for businesses of all sizes. It has a number of advantages and disadvantages, so you’ll need to weigh up whether hire purchase is right for you.

In many cases, hire purchase agreements can be particularly helpful for smaller organisations or start-ups where working capital is likely to be scarcer.

Hire purchase is therefore a useful facility where expensive machinery or equipment is required for your business’ operating practices. The consistent payment schedule associated with a hire purchase agreement means that you can retain a healthy cash flow and grow your business sustainably.

Budgeting becomes simpler, too, thanks to the fixed monthly amount to be paid.

Hire purchase is most likely to be right for you if you expect to be using the asset for a long time. For example, if you’re looking to finance machinery with a long lifespan, hire purchase might be right for you.

However, if you need to update your asset regularly – such as getting access to a vehicle that will need to be replaced with the latest models each year – there may be other more suitable forms of financing for you, like contract hire or finance lease.

You should also be aware that, under a hire purchase agreement, you’re also likely to be responsible for the servicing and maintenance of the asset, unless you’ve entered specifically into a maintenance contract.

Should you choose a contract hire arrangement instead, you will not be responsible for these aspects of ownership, because you will not own the asset.

Finding the right hire purchase agreement

Finding the right hire purchase agreement is crucial – it’s vital to avoid hamstringing your business with hefty monthly payments that could cause trouble further down the line.

The length of the agreement is also important. Think about when you’d like to own the asset outright and when the best time is for the ownership transfer to take place.

It’s also important to choose a reputable funder that has been authorised and regulated by the Financial Conduct Authority (FCA). You can search for a business’ name on the FCA Financial Services Register in order to confirm its reliability.

If you’re opting for a contract with a balloon payment at the end of the payment schedule, be certain that you have the finances to pay this at the end of the agreement.

Securing your hire purchase agreement

Securing a hire purchase agreement with Anglo Scottish has never been easier. Thanks to our funding panel of over 70 unique partners, we can quickly and easily offer you the best possible terms for your hire purchase agreement, with a wider range of terms available than at traditional banks.

Once you’ve decided upon the asset you’d like to finance, contact us. Our team of expert advisors will work with you to get to know your business and your specific requirements and establish whether a hire purchase agreement is right for you.

Then, we’ll contact our approved funders to find the best available terms for you. Once you’re happy with your terms and have signed the agreement, we’ll carry out one final check, and then you can get access to your asset.



asset how it works_1 decide


Decide on the asset you need to help your business grow


asset how it works_2 talk


Talk to us, tell us about your business and the asset you wish to acquire.


car-finance how it works_2 approval


We will reach out to our panel of lenders on your behalf to gain approval.


asset how it works_4 sign


Sign your document, once approved we’ll send you your documents to sign. After which we will transfer payment to your asset supplier

Final checks

asset how it works_5 final checks


We’ll do a final check to make sure everything is running smoothly, and you can start reaping the benefits of your new asset.


Get in touch with a member of our team for expert advice and to discuss your options.


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Contact us

A hire purchase agreement can be a great solution for businesses of a range of sizes and with a range of different goals. If you need access to expensive machinery, vehicles or business equipment and wish to own it long-term, then a hire purchase agreement could be perfect for you.

However, your ideal arrangement could vary depending on your specific business circumstances – a commercial finance agreement or different form of asset finance could be better suited to you, and our team will work with you to establish this.

Whether you’re still unsure about the best course of action for you, or simply want to find out more about the options available, our expert advisors are on hand to provide advice and guidance.

To find out more, contact us today.

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Need help? Call us on 0191 410 4776