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  • Leasing, hire purchase or another type of finance?

A new machine or a new company car?

Find out whether leasing, hire purchase or a one-time purchase funded by a loan is the best option for your company’s circumstances.

Machinery, equipment and vehicles are the backbone of many businesses. Whether we are talking about an Italian espresso machine, a lathe, a 3D printer or a lorry, they are at the heart of production, services and customer-facing activities. There can be several reasons for purchasing new equipment or updating your existing equipment: your old equipment may be showing signs of wear and tear, you might need more powerful equipment, or you may want to increase your capacity.

If you already have an operating business and a profitable order book, it is very likely that we can help you out with a corporate loan or a lease agreement.

Compare your finance options

Leasing and loans are popular ways to fund machinery, equipment or company cars regardless of the sector. Below you will find a comparison of various forms of finance, designed to help you choose the right finance model for you and your business. 

Hire purchase
Leasing
Corporate loan

Hire purchase

Hire purchase is an easy way to fund larger purchases without any large initial capital outlay. This form of finance is well suited to purchases intended for long-term use. Hire purchase usually leads to full ownership of the acquired asset. For the self-financing share, you can place a down payment or trade in a machine or a car.

This is how it works

  • A hire purchase agreement is concluded between the vendor and your company. 
  • After the purchase has been made, the vendor assigns the hire purchase agreement to Nordea Finance. 
  • You repay your hire purchase debt to Nordea Finance in instalments laid down in the agreement. 
  • The ownership of the asset is assigned to you once your debt has been repaid in full.

Pros

  • Suited to investments in movable fixed assets – both new and used
  • Financing share up to 80%
  • Interest is tax-deductible
  • VAT deduction on the purchase price on the spot

Guarantee

The equipment purchased under a hire purchase agreement serves as security for the financing. The equipment will be transferred under your ownership after the contract ends. 

What you pay

The deposit of the equipment purchase (for example your old equipment) and monthly hire purchase according to the contract. 

Read more on Hire purchase

Leasing

Leasing is a flexible form of finance in which your liquidity is not tied up and you know your lease fee for the entire agreement period.

This is how it works

  • In this arrangement, the cars, machinery and equipment are managed by Nordea Finance.
  • Your company pays a monthly lease fee, which gives you and your company the full right to use the equipment, car or machine.

Pros

  • Finance for up to 100% 
  • Lease fees are fully tax-deductible
  • An affordable finance solution
  • No registration costs
  • VAT-free purchase price 
  • You have full right of use – just as if you bought the asset
  • No liquidity tied up
  • Leasing can be used to finance almost any type of machinery and equipment – both new and used
  • You can choose between financial leasing or full-service leasing

What you pay

  • You pay a monthly or quarterly lease fee in advance for the agreement period laid down in the lease agreement. 
  • The lease fee can be a fixed or variable cost.
  • During the lease agreement, you may extend the agreement, buy the equipment or find a new buyer for the equipment.

Guarantee

The equipment purchased under a lease agreement serves as security for the financing. 

Read more on leasing options

Corporate loan

Corporate loan is a flexible and predictable finance solution – you know what you pay each month. 

This is how it works

  • When you take out a loan, your company owns the machinery. 
  • You can choose a fixed or a variable interest rate for your loan.

Pros

  • VAT is deductible
  • You can choose which type of loan is best suited to your business
  • Depreciations can be made from the investment

Guarantee

You must provide a guarantee, which can be either a mortgage on a property, a floating charge or a personal guarantee. Smaller financing (up to 25 000 euros) can be applied without guarantee. 

What you pay

You repay the loan (interest and instalments) within the agreed loan period.

Read more on Corporate FlexiCredit (<25 000€)

Read more on Euroloan (> 25 000€)

Three tips on how to get the best value for your money

Consider the pros and cons of buying a used piece of equipment/asset instead of a new one

Should I buy a new machine or a car or would a used one do just as well? When you are looking to buy new equipment for your company, it is often a good idea to browse the websites of dealerships that sell used machines and cars. A machine or a car typically loses a disproportionately large part of its value during the first 1–2 years despite often being as good as new. 

A used car, machine or a piece of equipment may, however, require more maintenance, which can result in higher operating costs. We recommend looking into your options to find out whether it makes sense to buy a new or a used piece of equipment.

Get help from an expert – ask for multiple offers

While navigating your options and negotiating with other parties can be time-consuming, it will improve your chances of finding the best solution for your business. We recommend visiting at least two manufacturers or vendors to get an accurate picture of what the market has to offer. You can also talk to different representatives of the personnel. 

You should also prepare carefully for the negotiations. Make sure that you have a clear idea of the purpose of the equipment, its role as a factor of production and how long you are expected to use the equipment for. When the manufacturer or vendor knows your circumstances, needs and expectations, they are more likely to be able to offer you a suitable solution. 

Get to know your options and requirements

It is often all about the details. If you are offered a car or a machine that is not tailored to your company’s needs and budget, you will most likely get a better (or a more affordable) deal from another vendor.

Talk to your friends and colleagues who have experience in the machine or car you are looking for and always read the small print in the agreement or offer. There can be many reasons why two vendors offer completely different prices:

  • Is guarantee and maintenance included?
  • How long is the delivery time?
  • Can a dealer provide servicing for the model in question?

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