Fixed Rate Hire Purchase (HP) is a way of spreading the cost of buying goods through making regular instalments made up of capital and interest calculated at a fixed rate at the start of the agreement.
Businesses who purchase plant, equipment and vehicles may choose to fund them using Fixed Rate Hire Purchase and preserve their working capital (cash), for things like tax, fuel, wages, and other running costs. As the interest rate is fixed at the outset it hedges against inflation and interest rate rises making it an option that helps with accurate budgeting.
A schedule of instalments is agreed in advance, which helps with cashflow planning and budgeting. They can be monthly, quarterly, annually or a bespoke schedule to match your business needs.
Ownership of the goods will be yours when you have made all instalments including an Option to Purchase Fee.
VAT relating to the purchase price is usually payable at the start of the agreement and is usually reclaimable. Tax relief may be available, including the Annual Investment Allowance or Corporation Tax full-expensing relief.
The typical duration 1 year to 5 years, borrowing over £5,000.
Goods may be repossessed if you do not keep up with repayments.
JCB Finance provide Fixed Rate Hire Purchase agreements regulated by the Consumer Credit Act (1974) to Sole Traders or Partnerships of 3 or fewer, borrowing up to £25,000.
What happens at the end?
You pay a nominal option-to-purchase fee at the end of the agreement, and ownership transfers to you.
How to apply
Call us on 0800 150650 and speak to one of our Relationship Managers. Open Monday to Friday 8.30am to 4.45pm, excluding Bank Holidays. See How to apply for finance page for more details.
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Disclaimer
Finance provided and subject to acceptance by JCB Finance Ltd (Registered in England No.972265 Registered Office: The Mill, Rocester, Staffordshire, ST14 5JW) who are registered with the Financial Conduct Authority as a lender. UK business users only. Terms apply. Subject to your consent, JCB Finance Ltd will pay a commission to the UK JCB dealer network which is a flat fee plus basic rate tax and employer National Insurance contributions for each JCB machine on the finance agreement. These payments are not additional fees that you will have to pay and is not added to the amount you pay under your finance agreement. Other products are available see JCB Finance Finance Options Explained
FAQs
Can I make changes once the agreement has started?
Some changes are possible e.g. changing monthly payment date. Fees and/or additional interest charges may apply if you wish to make a change after the agreement has started.
Can I end early?
If you wish to settle your agreement early you can request a quote via your JCB Finance Online account or email settlements@jcb-finance.co.uk or call 0800 150650. If you are a Limited Company a Partnerships of 4 or more, or borrowing over £25,000 and are likely to want to settle the agreement early, you may wish to consider a HP Plus, HP Variable or HP Equalised payments facility as you may save on interest payable when settling an agreement early.
What are the fees?
Fixed Rate Hire Purchase has an acceptance fee, payable with the first instalment after the agreement has started and an Option To Purchase Fee payable with your final instalment. These are payable on all Hire Purchase agreements and are documented from the outset.
What if my circumstances change?
Contact the Customer Services Team on 01889 594101 or customerservices@jcb-finance.co.uk who will be happy to assist you and discuss what options are available. Open Monday to Friday, 8.30am to 4.45pm (excluding Bank Holidays).
What if I want to sell the goods?
You cannot sell (or pass title) to any goods until you are the legal owner. When all payments have been made, including the Option To Purchase Fee stipulated on your agreement you have ownership of the goods.
If you wish to settle your agreement early you can request a quote via your JCB Finance Online account or email settlements@jcb-finance.co.uk or call 0800 150650.
Do I have a lump sum to pay at the end?
You may choose to have a final lump sum ‘balloon’ repayment – this would reduce the amount you pay in your regular instalments, but the balloon must be paid by you in full when it is due. The amount due would feature on your quotation and documented on your agreement from the outset. Having a balloon is likely to result in you paying more interest so speak to JCB Finance for details.
What happens at the end?
You pay a nominal option-to-purchase fee at the end of the agreement, and ownership transfers to you.
What if bank base rates change?
The interest on a Fixed Rate Hire Purchase agreement is calculated at a fixed rate of interest, agreed and documented at the outset. Therefore, the interest payable on your agreement is not affected by any changes in bank base rate once your agreement has commenced.
What about insurance?
You have a duty under the agreement to insure the goods on a comprehensive basis.
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