Leasing and Hire
The essence of this facility is much the same as for a purchase plan - the company wish to acquire an asset and repay the capital over the useful life of the asset. The difference here is that the client does not have any interest in taking ownership of the asset at the end of the agreement. Companies will utilise this plan for a number of reasons that may include taxation planning, to keep the asset off the balance sheet, cheaper repayments, VAT offset and the potential to upgrade equipment during the term of the agreement.
The common names for such agreements are Lease, Lease Hire, fully amortising lease, Finance Lease, full payout lease, Contact Hire, Operating Lease, long term hire and Off Balance Sheet facilities.