Finance Wizard

Triple Choice

All the control associated with ownership, but with more options and greater flexibility at the end of the term. A guaranteed residual value built into the agreement helps improve cash flow making the asset more affordable.

Key features and benefits

• You may eventually own the asset enabling you to claim writing down allowances.
• You control the value of the asset at all times.
• Flexibility - you have the luxury of being able to 'wait and see' before deciding what you want to do with the asset at the end of the agreement.

Typical assets

Specialised plant, buses and coaches, printing equipment, moulding equipment, machine tools, materials handling equipment, commercial vehicles and more.

Frequently Asked Questions

What tax allowances can I claim?

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

Can I reclaim the 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 assets. 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.

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.

Typical assets

Virtually all types of equipment, plant and machinery.

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.

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 the 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.

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

• 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.

Typical assets

Virtually all types of vehicles and business equipment.

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 rental?

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.

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.

Typical assets

Cars, commercial vehicles, plant and machinery, buses and coaches - in fact any asset where Lombard can support an appropriate residual value.

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.

Comparison Table

Product Comparison	Finance Lease	Operating Lease	Hire/Lease Purchase	Triple Choice
Ultimate ownership	No	Possible**	Yes	Possible
Rentals tax deductible	Yes	Yes	Interest only	Interest only
Preserves working capital	Yes	Yes	Yes	Yes
Off balance sheet*	No	Yes	No	Possible
Fixed term agreement	Yes	Yes	Yes	Yes
Term can be extended	Yes	Yes	No	Possible
Fixed or variable rate	Yes	Possible	Yes	No
Customer can claim capital allowances	No	No	Yes	Yes
Rental payment figure linked to future value of asset?	No	Yes	No	Yes
VAT on payment reclaimable	Yes	Yes	No	No
VAT on cost of asset reclaimable	No	No	Yes	Yes
Agreement 'on demand'	No	No	No	No
Additional security required	Possible	Possible	Possible	Possible
Service and maintenance required	Possible	Possible	No	No
* Classification as off balance sheet funding is subject to auditors approval; ** 'Planned rental' product only