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Sandwich bar: Leasing payments

You may decide to lease some items of equipment - perhaps your coffee machine - instead of purchasing them. The advantage of a leasing agreement is that the cost of major items can be spread over an agreed period, which will help cash flow.

Generally the payments are fixed at the beginning of the lease period and do not reflect movements in interest rates, although agreements over longer terms might include a variable rate option. Lease payments are made monthly.

Ownership of a leased item always remains with the leasing company, although you will normally be responsible for maintaining the item. You may be required to take out appropriate insurance.

Your equipment supplier may offer leasing facilities, but if not there are a number of companies which do. Members of the Finance and Leasing Association (FLA) abide by their Business Finance Code where applicable.

Helpful guidance on asset finance and leasing is available on the FLA website.