To finance or not?

[Mountain man]

13 years ago I got finance to buy a nearly new transit, best I could afford. Still got it, it's semi retired now but comes out a few times a month.

Best ten grand I ever spent.

My advice, borrow if you have to.

[nepia]

Agree there.

I would never get a bank loan again though, it's a complete rip off but if you lease hire a vehicle or plant you have the benefit of being a business expense and all tax deductible

 

 

 

Yes, but I'm hoping they'll sell me the thing at the end of the lease. If not I have a monstrous body-fixing bill awaiting me! Something to consider if you're determined to return the vehicle at the end of the lease; the lessors want it back in showroom condition.

[MattyF]

Yes, but I'm hoping they'll sell me the thing at the end of the lease. If not I have a monstrous body-fixing bill awaiting me! Something to consider if you're determined to return the vehicle at the end of the lease; the lessors want it back in showroom condition.

 

 

Not with hire purchase like I got with my timber wolf.... I would not lease plant or a vehicle.

Once you have paid off hire purchase it is yours, BUT you just pay them £100 a year after the payments have finished and when it's sold you tell them and that's the end of it and you keep all the Money... So you could sell it for £10 to a mate and buy it back again and not pay the £100 yearly fee at the end of the contract ,From my experience the chipper got stolen once I had paid it off so I don't pay them the £100 a year hire any more.

All of it is tax deductible as its classed as hire , I would get any large machinery I needed like this.

[gensetsteve]

Agree there.

I would never get a bank loan again though, it's a complete rip off but if you lease hire a vehicle or plant you have the benefit of being a business expense and all tax deductible

 

Why was the bank loan a rip off ? leasing the way I saw it was the best way if you have no capital and want easy but the most expensive long term as you dont own the vehicle at the end. Tax wise no difference with either. With a bank loan you get all the vat back straight away is that the same with leasing ? or do you get a bit back with ea payment.

[MattyF]

I just realise I put lease hire instead of hire purchase in my first post!

To much interest on bank loans and you and the tax break is not as good as hire purchase.

[gensetsteve]

I just realise I put lease hire instead of hire purchase in my first post!

To much interest on bank loans and you and the tax break is not as good as hire purchase.

 

How much better is the tax break on hire purchase ? the thing that puts me of hire purchase is you owe a couple of grand still and business dries up for a few months its easy for them to take truck and sell cheap. Bank loan its a hell of a lot harder to get the truck especially if its nearly paid and a tool of your work.

[njc110381]

A loan over two years would cost me £400. Not a great deal really. But it's the best part of £100 per week coming out of my income so I think I'll put it off for a bit longer! The truck I have now is as good as worthless so the trade in value doesn't count for a lot.

 

Some of it comes down to me wanting a tipper and I'm not wasting money fitting one to the old shed I drive at the moment. It's just not a good investment!

[scraggs]

Funny to see how peoples opinions differ.

Personally I would rather do with what I have than borrow, newer doesn't mean better, and no one can guarantee work may be good for the next 2 or 3 years, what if things go slack ?

[skyhuck]

The more years you have been trading the more confident you become, if you have traded for 20 years and survived a recession, you can feel pretty confident that the phone will keep ringing.

 

So long as I can put down a decent deposit I happy to borrow against a fixed asset, if things go bad the worst thing thats gonna happen is you sell the asset and pay off the loan.

[Mountain man]

Newer does means better. Of course you can't guarantee

you'll have work in two or three years, but that's the uncertainty of business.