What is a finance lease?

A finance lease is a type of commercial lease in which the legal owner of the asset — in this case, a tractor — rents the asset to the user of the tractor for an agreed-upon period. When a lessee enters into this agreement, they have full operating control of the asset. They will have responsibility and assume the risks and rewards that come with owning the asset. For accounting purposes, the lease gives the lessee the same economic characteristics as if they had full ownership of the tractor. The lessee will record the asset as a fixed asset on their balance sheet. In this situation, the lessee will record the interest of the lease payment as an expense. The lesser charges rent in exchange for lending the asset. The lessor retains ownership of the asset but the lessee gains exclusive use of the asset (providing they abide by the terms of the lease). The lessee is obliged to make rental payments that cover the original cost of the asset. There is an obligation to pay all of the fixed rental amounts, sometimes including a percentage of the purchase price of the vehicle at the end of the contract.

What is an operating lease?

An operating lease in contrast is the simplest form of equipment leasing, where the customer doesn't take on the risks and rewards that come with owning the asset (such as maintenance costs). An operating lease or contract hire is a way of renting an asset for your business over a short or medium time frame without taking on any risk. With an operating lease, you can get a tractor hire over a fixed term, with lower monthly payments and without the commitment of ownership.

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Covid-19

Has the 31 January penalty deadline for taxes been extended?

The “immense pressure” the coronavirus pandemic has put many individuals under has prompted HM Revenue and Customs (HMRC) to provide self-assessment taxpayers with an extra month to file their online tax returns without receiving a penalty.

27 Jan 2021

Covid-19

Government offers grants to survive post covid

One-off grants worth up to £9,000 will be available for businesses in retail, hospitality and leisure to help them stay afloat until spring 2021, the Chancellor has announced.

5 Jan 2021

Covid-19

Can I apply for a second CBILS loan?

On December 17th 2020 Chancellor Rishi Sunak announced that the Coronavirus Business Interruption Loan Scheme (CBILS) is being extended to the end of March 2021. Previously, the deadline was set to the end of January.

4 Jan 2021

London red bus going across bridge with houses of parliament in background

Covid-19

Coronavirus emergency loan schemes extended

Chancellor Rishi Sunak plans to extend the government-guaranteed emergency loan schemes and furlough scheme to provide further financial help to UK businesses impacted by the pandemic.

18 Dec 2020

view of st pauls cathedral and bridge in London

Covid-19

Flexibility and funding for businesses in winter economy plan

On 24 September 2020 the Chancellor Rishi Sunak announced a further set of targeted measures to protect jobs and help businesses remain financially feasible as we head into the winter months.

24 Nov 2020

Covid-19

British Business Bank extends CBILS deadline — apply by 30 September

The government-backed British Business Bank (BBB) has provided accredited lenders with extra time to grant state-backed loans to adversely affected SMEs and larger firms through the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

24 Nov 2020

Covid-19

Some undertakings in difficulty to benefit from the CBILS

More small businesses are set to benefit from the Coronavirus Business Interruption Loan Scheme (CBILS) after UK Government and industry lobbying led to recent changes to state aid rules.

15 Dec 2020

Covid-19

Chancellor Rishi Sunak reveals £30bn plan to save UK jobs

On July 8th, Chancellor Rishi Sunak announced a series of new measures worth £30bn in a bid to prevent mass unemployment as the economy is hit by the coronavirus pandemic.

15 Dec 2020

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Covid-19

Sunak expands £500m Future Fund for startups

The UK government is expanding the £500m Future Fund for UK firms that have been adversely affected by the coronavirus pandemic, allowing businesses that have moved their HQs abroad to access the scheme.

15 Dec 2020

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Funding Options Blog

Has the 31 January penalty deadline for taxes been extended?

Government offers grants to survive post covid

Can I apply for a second CBILS loan?

Coronavirus emergency loan schemes extended

Flexibility and funding for businesses in winter economy plan

British Business Bank extends CBILS deadline — apply by 30 September

Some undertakings in difficulty to benefit from the CBILS

Chancellor Rishi Sunak reveals £30bn plan to save UK jobs

Sunak expands £500m Future Fund for startups

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