Answer to Question #305600 in Marketing for Kimse

Question

Explain the benefits of business participation in hire purchase as a form of financing

Answer 1

Hire purchase is an arrangement for buying expensive consumer goods, where the buyer makes an initial down payment and pays the balance plus interest in installments. The financial benefits for a company using a hire purchase plan include maximizing working capital, the ability to enhance the financial appearance of the company to investors, and the potential of payment flexibility.

Further, it helps access high-spec Assets, lower interest than other funding options, it is possible to claim capital allowances against tax and allows clients to own the asset after the last installment.