Can you lease equipment under £1,000 in value?

Can you lease equipment under £1000 in value?

The short answer is yes, however, you may struggle to find a leasing company that will lease equipment under £1,000 in value.

What is the minimum value at which you can lease equipment in the UK?

There are hundreds of equipment leasing companies in the UK and they all have different policies on whom they lend to, the assets they will finance, and the minimum lease value.

Speaking last year to the leasing division of ABN AMRO Bank in the UK, they are looking for lease transactions with a value in excess of £10m. A number of other leasing companies have since changed their lending policy from a minimum value of £5,000 to £15,000 due to the pandemic last year.

Others have a minimum deal value of either £2,000 or £3,000.

Some leasing companies – like ours – can finance values in excess of £500.

Why do leasing companies not like leasing equipment under £3,000?

There are a few reasons. Put simply, leasing companies have to lend money to stay in business. They would have to write 250 £1,000 lease deals to lend the same as a £250,000 deal. For some leasing companies it is a lot easier to find and focus on larger value transactions. These bigger deals are what keeps the business running for many companies.

Even though lease rates are more expensive for small deals, there is a cost of underwriting, processing, and managing a lease deal over its life. Often asset finance and leasing companies will divide their cost base by the number of deals they write every year to get a “cost of loading a new lease deal.” This cost – often around £150- £250 – will mean the leasing company may lose money on small lease transactions, which is why some tend to stay away from these smaller deals.

Why will a leasing company arrange a lease for £1,000 if they lose money?

Leasing companies offer a service to their end user customers, suppliers and brokers. They will make the profit up elsewhere in their lease portfolio with the introducer. It also helps to keep competition out of their account.

Why do WestWon offer leasing for capital equipment values under £1,000?

Three reasons:

1. Here at WestWon we pride ourselves on quality customer service. Making sure the customer is happy is our number one priority, so any finance needs you may have, we will take care of it, no matter how big or small the deal may be!
2. Creating and building a relationship with a supplier offering leasing from £1,000 up to £10m. We do not wish a competitor to handle the smaller deals
3. We are interested in the end user customer base. Those small micro-ease customers can grow and will come back to us for larger transactions later in their business journey.

So how does WestWon make profit on lease transactions under £1,000?

1. We use echo sign documentation for speed of processing
2. Also, we collect the rentals via direct debit
3. We have DORIS, our own inhouse CRM and lease deal processing system that automates as much as possible. This includes everything from data loading to invoicing and API links for cash collection
4. In the future, we hope to be lending our own money out of our own book, which will enable us to make profit more easily

Contact Us

If you would like to find out more information about whether you can lease equipment under £1,000 in value here, or any other finance needs you may have then please call us on 01494 611 456. Alternatively, you can email us on hello@westwon.co.uk. You can also see more over on our LinkedIn page.