hp fixed

Fixed interest with a flexible repayment pattern to match your needs.

Fixed Rate Hire Purchase, commonly shortened to ‘HP’ is a well-known form of asset secured borrowing. It offers accurate budgeting and the security of fixed repayments that protect against rising interest rates.

Along with all the benefits of ownership without the initial capital outlay, payments are made up of capital repayments and fixed interest – VAT is usually fully reclaimable and tax relief may be available just as if you’d paid cash in full.

Repayments can be made monthly, quarterly, half-yearly or annually, and are fixed for the full period of the agreement. Alternatively, a bespoke repayment pattern that matches your business’s income and expenditure cycles can be custom-made.

The goods become yours once all the payments have been made, including the option-to-purchase fee.

Benefits of Fixed Rate Hire Purchase:

• You will own the goods after the final payment
• Interest rate is agreed and fixed at the time of documentation
• Fixed repayments for capital and interest
• Accurate budgeting
• VAT is usually fully reclaimable
• Hedges against inflation and interest rate rises
• Interest charges are usually tax allowable
• Tax writing-down allowances may be available, including the Annual Investment Allowance or Corporation Tax full expensing
• The asset itself offers the security to the lender, therefore other forms of security such as personal guarantees or property are usually not required.

What happens at the end:

You pay a nominal option-to-purchase fee at the end of the agreement, and ownership transfers to you.

Want to end your agreement early?

You can request a calculation at any point during the agreement which will show you how much you would need to pay if you wanted to end the agreement early.  The goods are yours when all payments have been made.

Each repayment is made of capital and interest. The proportion of capital and interest will vary each month and the capital balance reduces as each repayment is made. So, the amount of interest you pay at the beginning of the agreement is higher than it is at the end.

If you are a limited or public company, limited liability partnership, or a partnership with four or more partners, and are borrowing over £25,000 and are likely to end the agreement early or pay off lump sums, you may wish to consider our HP Plus, HP Variable or HP Equalised Payments options – you may be able to save on interest payable because of how they are calculated on daily basis.

Thinking of ending early? Request a cancellation

How it compares:

Other considerations:

Assets on the agreement may be repossessed if you do not keep up with the payments

Typically, the minimum balance to finance on any agreement type with JCB Finance is £5,000.

Help for sole traders and small partnerships:

JCB Finance provides asset finance to UK business users in agriculture, construction, and industry on JCBs and complementary assets to help their businesses thrive.  So, if you are a sole trader or partnership of three or less borrowing up to £25,000 we may be able to assist you with a Fixed Rate HP facility regulated by the Consumer Credit Act 1974.