When a company uses hire purchase Singapore, they don’t have to pay anything in its full amount for the purchase up front. It is something which might be quite beneficial for a company which is out looking to obtain equipment which is expensive but doesn’t seem to have the right capital and does not want to increase its debt budget by having to borrow money.
At times, companies might manage to keep its money used to leasing the equipment and the equipment being able to off their balance sheets, thus providing an ROA – return on assets which is better looking.
Another financial benefit of utilizing a hire purchase plan is a plan like that normally comes with contract maintenance, and thus the company doesn’t have to worry regarding the need for paying for an expensive cost of repair which might arise. Having to expense the rental payments might be more advantageous when it comes to the tax as compared to buying and having to depreciate the equipment.
A plan for hire purchase tends to also be beneficial in that it doesn’t obligate the company to keep the equipment and payment terms are normally quite flexible.