FINANCE ASSISTANT

Contract Hire

The solution for companies who want to concentrate on important business activities and avoid the financial risk and administrative burden of owning their vehicle fleet.

Key Features and benefits

• Fixed rentals for the whole package making budget planning easier.
• Flexible terms to meet your requirements, variable duration and mileage terms.
• Maintenance of vehicles can be included in monthly rentals, spreading the cost.
• Removes depreciating assets from the balance sheet.
• Removes the associated risks of owning the vehicles.
• 50% VAT reclaimable on the finance element of agreement, 100% on the maintenance element - applicable if vehicle used for business and private use.
• 100% of the VAT is recoverable on both the finance and maintenance elements of the agreement - applicable if vehicle is used solely for business purposes.
• Flexible invoice arrangements to reduce administration.

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.

• When the asset is sold you normally receive the lion's share of the sale proceeds.
• 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.

* Special rules apply to 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 would normally be entitled to a lion's share of the sale proceeds 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.

Hire Purchase / Lease Purchase

A straightforward repayment facility where you ultimately own the asset. Repayments can be structured in a flexible way using initial payments and/or a 'balloon' (final lump sum).

Key features and benefits

• With ownership you have total control over the asset.
• Ownership normally carries the potential for claiming writing down allowances and/or capital grants, including any enhanced first year allowances.
• VAT on the cost of the asset is normally reclaimable*.
• Fixed or variable interest rate - you make your own assessment and choose accordingly.
• The interest element of repayments can normally be offset against taxable profit*.
• The asset appears on your balance sheet.

* Special rules apply to cars.

Balanced Payments Plan:

The best of both worlds... you opt for a variable interest rate but with fixed repayments. So that when rates fluctuate, only the number of repayments varies but the amount stays the same, thus helping your administration and budgeting.

Scheduled Balance Plan:

For the variable rate lease purchase facility, with capital being collected on a different frequency from the interest, i.e. capital monthly and interest quarterly.

Frequently Asked Questions:

What tax allowances can I claim?

You can normally claim writing down allowances on the cash price of the asset as shown in the agreement. The interest element of your repayments is usually allowable against taxable profit.

Can I reclaim VAT charged on the payments?

Providing you are registered for VAT, you can normally claim back the VAT payable on the purchase price of the asset. 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 until you take ownership of the asset.

Operating Lease

Particularly effective for specialised assets and vehicles of higher value. 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.

* 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.