Business hire purchase Ireland: own the asset at the end

The lender buys the asset and your company hires it for a fixed term, paying instalments. Once the last instalment and a small purchase fee are paid, ownership passes to your company. You use the asset from day one, and the lender can repossess it if payments are missed. Hire purchase suits companies that want to own long-life equipment or vehicles.

The lender, until your company pays the final instalment and any option-to-purchase fee. Until then your company cannot sell the asset or use it as security for other borrowing without the lender's consent. After the last payment, ownership passes to your company. Check the purchase fee, and any final balloon payment, in the agreement before you sign.

Usually, yes, if your company is VAT-registered and the asset is for its taxable business. Revenue treats hire purchase as a supply of goods when the asset is handed over, so VAT on the full price is due at the start and can be reclaimed in your VAT return, except on most cars, where recovery is limited. The credit charges are exempt from VAT. Plan cash flow for the VAT until it is reclaimed.

Usually, yes. A company buying plant or machinery on hire purchase can generally claim wear and tear allowances at 12.5% a year over eight years once the asset is in use, while the interest element is treated as a business expense. Allowances on cars are restricted by emissions and cost. Confirm the treatment with your accountant.

There is no standard rate: each lender prices the deal on the asset, its age, the term, the deposit and your company's accounts. Assets that hold their value, such as vans and machinery, usually price better than specialised or older items. Many offers are quoted as a flat rate, so ask for the APR and the total amount repayable and compare like for like.

A larger final payment that lowers your monthly instalments during the term. Some lenders offer it on assets that hold their value, such as vans and machinery. It eases monthly cash flow but means more interest overall and a lump sum at the end, which your company must be ready to pay or refinance.

Yes, with many lenders, subject to the asset's age, condition and resale value. Lenders usually want the agreement to end while the asset still has value, so older equipment tends to get a shorter term or a larger deposit. Buying from a dealer with an invoice and service history is usually easier to finance than a private sale.

Yes, you can usually ask the lender for a settlement figure and pay the agreement off early. Early-settlement charges can apply, especially on fixed-rate agreements, and you may save less interest than you expect. Ask for the settlement figure in writing and compare it with the remaining payments before deciding.

Contact the lender straight away. Because the lender owns the asset until the end of the agreement, it can repossess it if payments are missed, and your company may still owe a balance after the asset is sold. Any director's guarantee can also be called on. Regulated lenders must follow set procedures for SMEs in arrears.

Possibly. Equipment and vehicle dealers often have finance partners, and banks and asset finance companies offer hire purchase directly. Tell us what your company needs and we'll tell you honestly whether our panel can help, or where to apply instead.