What types of asset finance agreements can be provided?
1.
Hire Purchase.
Under this type of agreement the borrower has the opportunity to purchase the equipment at the end of the period. After payment of a nominal option to purchase fee the title passes from Potential Asset Finance to the borrower.
2.
Lease Purchase.
This type of agreement has developed over the past two decades and is virtually the same as Hire Purchase but the product permits for more variation in the payment structure. For example, a balloon payment could be included for a finance deal on a luxury car or the repayments could be structured around the borrowers fluctuating cash flow. In the agricultural industry it is not uncommon for the repayments to be structured so that they are higher in the summer than they are in winter.
3.
Finance Lease.
In a leasing agreement, ownership of the asset always remains with Potential Asset Finance. At the end of the lease term the hirer may sell the equipment to a third party and receive a percentage of the sales proceeds (usually between 90-95%).
