Hire purchase is an agreement where you pay for an asset in instalments and own it once the final payment and any option-to-purchase fee are made. The lender buys the equipment and hires it to you for an agreed term. You use it from day one, but legal ownership only passes at the end of the agreement.
It suits equipment you intend to keep: vans and trucks you’ll run for years, machinery that stays central to the business, plant with a long working life. Payments are usually fixed, which makes budgeting more predictable than a variable-rate facility.
The trade-offs are real. You carry the depreciation risk — if the asset is worth less than you expected at the end, that loss is yours. The agreement is secured on the asset, so falling behind on payments can lead to it being repossessed. Ending the agreement early is usually possible but may involve a settlement figure and charges.
CW Asset Finance is a credit broker, not a lender. We approach lenders on our panel of 60+ funders on your behalf; whether an agreement is offered, and on what terms, depends on the lender’s assessment of your business and circumstances. Tax and accounting treatment varies — check with your accountant before deciding.