Finance Lease
A popular, flexible method of funding a broad spread of business assets. Lombard's Finance Lease offers all the practical benefits of ownership without any of the potential burdens.
Key features and benefits
The flexible repayment structure gives you immediate and full use of the asset for a minimal outlay.
Rentals can be set according to your cash flow - especially beneficial if your business is seasonal.
Fixed or variable interest rate - you make your own assessment and choose accordingly.
Rentals can normally be offset against taxable profit*. Asset treated as 'on-balance sheet'.
VAT is paid on the rentals not the purchase price*.
Lombard, as the owner of the asset, claims writing down allowances, and these are reflected in the rentals you pay.
Typical assets:
Virtually all types of vehicles and business equipment.
*special rules apply to company cars.
Frequently asked questions:
Can I claim any tax allowances?
As owners, Lombard claims the appropriate writing down allowances and these are reflected in the rentals you pay. You should be able to offset your rentals against taxable profits, normally over the same period as your agreed depreciation policy. If in doubt, consult your auditors.
Can I claim the VAT charged on the rentals?
Providing you are registered for VAT, you can normally claim the VAT payable on the rentals. Special rules apply to company cars.
What if the asset is lost, stolen, damaged or destroyed or becomes subject to a total loss claim during the period of the lease?
You are responsible for the asset and for any outstanding balance on the agreement. Comprehensive insurance, covering at least the full replacement cost of the asset is therefore vital.
Who is responsible for servicing and repair?
Unless you have servicing and maintenance built into your agreement, you are responsible for maintaining the asset in good condition. If you fit any replacement or additional parts to the asset, they become the property of Lombard.
What happens at the end of the agreement?
Either we can sell the asset in which case you may be entitled to a rebate of rentals based on the net proceeds of the sale or you can continue to lease the asset for a further period, paying a nominal annual rental. The further period normally lasts for the useful life of the asset.
When the asset is sold at the end of lease, can I introduce my own buyer?
In most cases we prefer you to introduce a buyer and if a deal is acceptable to both parties, we will raise a sales invoice accordingly. Please note, we are unable to sell the asset to you or anyone connected with you.
Operating Lease
Particularly effective for high value, specialised assets and vehicles. Lombard builds in a residual value to reduce the rentals, thus helping cash flow and making 'off-balance sheet' funding possible.
Key features and benefits
Lombard bears the residual risk on the equipment's value.
Rentals can be set according to your cash flow - especially beneficial if your business is seasonal.
Rentals can normally be offset against taxable profit*.
Asset normally treated as 'off-balance sheet' (subject to your auditors' approval).
Fixed or variable interest rate - you make your own assessment and choose accordingly.
Typical assets:
Cars, commercial vehicles, plant and machinery, buses and coaches - in fact any asset where Lombard can support an appropriate residual value.
*special rules apply to company cars.
Frequently asked questions:
Can this type of lease be 'off balance sheet'?
Yes, subject to confirmation by your auditors, you have the option to classify your lease as 'off balance sheet'.
Can I claim any tax allowances?
As owners, Lombard claims the appropriate writing down allowances and these are reflected in the rentals you pay. You should be able to offset your rentals against taxable profits, normally over the same period as your agreed depreciation policy. If in doubt, consult your auditors.
Can I claim the VAT charged on the rentals?
Providing you are registered for VAT, you can normally claim the VAT payable on the rentals. Special rules apply to company cars.
What if the asset is lost, stolen, damaged or destroyed or becomes subject to a total loss claim during the period of the lease?
You are responsible for the asset and for any outstanding balance on the agreement. Comprehensive insurance, covering at least the full replacement cost of the asset is therefore vital.
Who is responsible for servicing and repair?
Unless you have servicing and maintenance built into your agreement, you are responsible for maintaining the asset in good condition. If you fit any replacement or additional parts to the asset, they become the property of Lombard.
What happens at the end of the agreement?
It will depend on the type of Operating Lease you have. You should consult our Customer Service centre just before the end of the period of hire; we would be delighted to discuss the options open to you.
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