The rent to purchase or RPO product is well known in capital equipment intensive industries.
This product can provide increased flexibility and options to business owners that are in two minds as to whether they should purchase additional machinery or incur costly cross hire expenses.
The idea of renting a piece of equipment for a defined period and then having the ability to purchase that same machine with a rebate on rentals already paid, allows users to manage the risk of that equipment purchase and essentially try the unit before they buy it.
• Purchasing specialised equipment not typically in their fleet.
• When the borrower has a particular contract in place they need to gear up for.
• A business is looking to reduce expensive cross hire expenses.
• The borrower is unable to source funding via the banks and is looking for a flexible, streamlined option.
Once the minimum rental period is done, there are various options that the business can choose such as to extend the rental payments over an additional term, hand the equipment back to the lender or make an offer to purchase the equipment.
Key Benefits of Rent to Purchase
Flexible end of term options including offer to purchase for price reduced by already paid rentals
Rental payments may be claimed as a tax deduction
No ownership obligations