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Leasing Products

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An increasingly popular form of asset finance where ownership never passes to you but the cost of the instalments can be offset against your taxable profits during the lease term. VAT is spread over the length of the term and there is an acceptance fee payable at the start of the agreement which varies depending on the amount financed.

Click on the product types below to expand information about them.

jcb flexilease

A new type of Operating Lease with all its associated features and benefits but with one big difference – any profit over and above the investment value (similar to a residual value) is returned to you when the plant is sold. Any loss made on disposal is met by JCB Finance. This is a win-win situation for your business. Restricted to JCB models and other selected plant, return conditions apply. Watch our short video to learn more of the features and benefits of JCB FlexiLease

JCB FlexiLease has all the features and benefits of an ordinary Operating Lease - fixed low cost lease instalments reflecting a predicted future investment value which remains unpaid by the customer. However, JCB FlexiLease overcomes one of the traditional customer objections to leasing, which is - who retains any profit over and above the investment value when the plant is sold? Normally this would be the leasing company - which can lead to concerns that the investment value has been set too low in order to reduce the risk and create a greater profit opportunity for the leasing company.

JCB FlexiLease overcomes this profit argument because any profit on sale, over and above the original investment value, will be kept by you. In addition you will be told what the investment value is at the outset. Any loss made on disposal, maybe because the investment value has been set too high, is met by JCB Finance. This is a win-win situation for your business - retaining all of the reward but taking none of the risk.

The only thing you have to do is to act as the agent of JCB Finance in selling the machine within 30 days of the end of the lease term. The machine must always be offered first to the original supplying dealer, but after that you are free to seek alternative prices from other potential buyers. Now that this major impediment has been removed JCB FlexiLease could prove to be a more attractive alternative to Hire Purchase (HP). In fact it shares some of the benefits of traditional HP but without the risk.

Benefits:

  • Low capital outlay – usually one monthly instalment per year of the lease
  • No VAT payment due up-front as the VAT is paid with each instalment
  • Low fixed instalments due to the investment value – allows for accurate budgeting and improves cash flow during the lease term
  • Tax efficient - the instalments are usually 100% allowable against taxable profits so the entire cost could be written-off in as little as 3 years
  • Profit from the disposal – no risk and all the reward
  • A hedge against future inflation and interest rates rises
  • The ability to be linked with extended warranty (JCB Premier Cover) and service agreements for total peace of mind
  • Potential off balance sheet*
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operating lease

A lease with fixed instalments reflecting a predicted future residual value which remains unpaid by you. Return conditions apply.

The residual risk is taken by JCB Finance who recover the machine at the end of the period and attempt to sell it in order to realise this unpaid amount. This transfer of risk may allow the customer to treat the asset as off balance sheet - which can facilitate significant improvements on some of the key accounting ratios like return on capital employed. In addition the cost of the instalments can be offset against taxable profits. This tax efficient form of leasing is popular with Local Authorities due to their limited capital budgets and regulations that dictate the removal of residual value risk. It is also much used by public limited companies where accounting ratios are avidly scrutinised by the stock market. If required, repair and maintenance contracts may be added to this type of agreement which then becomes better known as Contract Hire – a very good way of placing a ceiling on the majority of costs, apart from the fuel and operator, of operating plant and machinery.

Benefits:

  • Low capital outlay - usually one monthly instalment per year of the lease
  • Spreads the impact of VAT which is collected on each rental as it falls due
  • Low fixed instalments
  • Tax efficient
  • Accurate budgeting
  • Preserves working capital reserves
  • Removes residual value risks
  • Possible off balance sheet funding
  • Easily combined with dealer service, repair and maintenance contracts and extended warranty (JCB Premier Cover) to offer total peace of mind
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contract hire

Contract Hire is an Operating Lease that is combined with service, repair and maintenance agreements – usually from your local JCB dealer. These agreements can be combined with JCB PremierCover - an extended JCB warranty package offering the same component protection as the initial manufacturer’s warranty. Return conditions apply.

Contract Hire can represent the ultimate risk free method of acquiring, running and maintaining plant, putting a ceiling on your costs and releasing additional capital to invest in your business. The administrative burden and financial risk of predicting the running costs of your plant for the period of the contract is completely removed.

Contract Hire is the name usually given to an Operating Lease that is combined with service, repair and maintenance agreements – usually from your local JCB dealer. These agreements can be combined with JCB PremierCover - an extended JCB warranty package offering the same component protection as the initial manufacturer’s warranty. JCB PremierCover gives you complete peace of mind whilst ensuring that you maximise machine up time, productivity, performance and profitability. All the other tax and accounting benefits of Contract Hire mirror those of an Operating Lease.

Benefits:

  • Low capital outlay
  • Spreads the impact of VAT which is collected on each instalment as it falls due
  • Low fixed instalments
  • Tax efficient
  • Accurate budgeting
  • Preserves working capital reserves
  • Removes residual value risks
  • Possible off balance sheet funding
  • Service, repair and maintenance contracts plus extended warranty (JCB Premier Cover) included to offer total peace of mind
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finance lease

Less popular due to changes in tax rules but Finance Leases still enjoy the ability to offset the cost of the instalments against taxable profits. The machine can continue to be used after the primary period, in exchange for a nominal annual continuing period instalment.

Due to changes in tax rules there is now little cost differentiation between a Finance Lease and a Hire Purchase agreement. However, Finance Leases still enjoy the ability to offset the cost of the instalments against taxable profits. This ability may dramatically increase the value that a business writes off against tax, especially if the asset is replaced at the end of the lease. In essence a three year lease will result in writing off 100% of the instalments against taxable profits. An HP agreement would take twelve years to write off more than 90% of the asset value when using the writing down allowances on a reducing balance. Leases also enjoy a low initial capital outlay and the VAT, paid on each instalment, is therefore spread over the period of the lease. The machine can continue to be used after the primary period, in exchange for a nominal annual continuing period instalment. Although ownership never passes to the customer, when the machine is no longer required, a high percentage of the ultimate net sale proceeds is refunded as a rebate of instalments.

Benefits:

  • Low capital outlay - usually one monthly instalment per year of the lease
  • Spreads the impact of VAT which is collected on each instalment as it falls due
  • Tax efficient
  • Accurate budgeting
  • On sale of the asset a high percentage of the sale proceeds is refunded
  • Can be linked to dealer service, repair and maintenance agreements
Contact us about this product

Recently Added Case Studies

  • Fleet profits from Flexilease finance
  • JCB Flexilease
  • Read more