Tag: Interest Rates

What are the benefits of using hire purchase?

Need to purchase an asset, but don’t have the money to buy it upfront? Take out a hire purchase agreement to receive the asset now and pay for it in affordable instalments. 

Hire purchase is a popular type of asset finance popularly used by businesses to buy vehicles, machinery and equipment.

Whilst you are still paying for the asset, the creditor is the legal owner, but once you’ve finished your payment plan it’s all yours.

Here are just a few of the benefits of buying an asset using a hire purchase agreement:

No need to pay a large sum of money upfront– Whilst you may be required to put down a small deposit, the cost will be nothing like paying for the asset upfront. This is particularly useful if it’s a large and unexpected cost, like a vehicle or key piece of machinery breaks down.

Flexible and affordable payments– Hire purchase allows you to spread the cost of the asset over a set period, so you’re paying off a small, affordable sum each month.

Protect your cashflow – Spreading the cost helps you to look after your business’ cashflow. Healthy cashflow is essential for developing and growing your business.

Own the item at the end of the payment plan – At the end of the payment plan, the asset is yours to keep!

Immediate use of the item – You can start using the asset immediately, meaning no expensive downtime whilst you save up the funds.

High quality asset– Many businesses find that they are able to afford vehicles and equipment of a much higher quality and specification through hire purchase than they would have if they were paying upfront. 

Fixed interest rates– Hire purchase interest rates are fixed, meaning no uncertainty on costs, helping you to keep your cashflow stable.

 No VAT on monthly repayments– VAT is paid upfront by you along with any deposit required. You will then re-claim the VAT in your regular payments.

For more information about our hire purchase agreements, or to discuss your requirements in more detail, give our team here at Richmond Asset Finance a call on 0113 288 3277.

Interest rates rise within a year?

Bank of England poll shows 49% of households expect an interest rates rise in the next 12 months

Half of all Britons expect interest rates to rise over the next 12 months, according to a Bank of England survey.

The Bank’s quarterly poll showed 49pc of people expected policymakers to begin increasing rates from a record low of 0.5pc within a year, up from 42pc in May.

This is the highest proportion since May 2011, when the economy was showing signs of recovery and three policymakers were voting to raise rates to keep a lid on inflation.

The survey showed 43pc of respondents expected rates to rise “a little” over the next 12 months, while 6pc believed they would go up sharply. Just 4pc of respondents expected rates to fall.

The poll of 2,000 people was conducted between August 7th and 15th, meaning some respondents would have seen the Bank’s latest Inflation Report, which was published on August 13 and showed the economy remained strong, despite weak wage growth.

However, the answers were collected before minutes of the Bank’s August interest rate meeting were published, which revealed that two rate setters – Martin Weale and Ian McCafferty – voted for a 0.25 percentage point increase to 0.75pc.

Mr Weale voted for a rates to rise between January and July 2011, when the economy was picking up and inflation was close to hitting 5pc. He was joined by Andrew Sentance, a former external member of the MPC and Spencer Dale, ex-chief economist.

The survey also showed inflation expectations were creeping up. Households believe prices will rise by 2.8pc over the coming year, compared with 2.6pc three months ago and the current inflation rate of 1.6pc.

For the next two years, inflation expectations, as measured by the Consumer Prices Index (CPI) rose to 2.8pc from 2.5pc in May, while inflation expectations five years from now rose to 3.4pc from 2.9pc in May.

A fifth of respondents said higher interest rates would be best for the economy, unchanged from May, while more than a third said rates should stay where they are.

[Telegraph]