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  • F.A.Q's Our most Frequently Asked Questions.

MHJ Business Finance.
First Floor Offices,
137 Barnards Green Road, Malvern, Worcestershire,
WR14 3LT

Tel: 01684 568700
Fax: 01684 568711
E.mail: info@mhjfinance.co.uk

Consumer Credit Licence No. 488590.

Standard Asset Terms

Capital Allowances
These are tax allowances that the owner of equipment is able to claim back against taxable income. If your lease agreement allows you the option to purchase the asset, you can claim capital allowances. If however, the finance company retains ownership, they claim this allowance and usually pass on the benefit to you in the form of smaller rentals.

Peppercorn Rent
Also known as 'secondary rental', this is a nominal (i.e. small) rent that you pay once the original term of your lease has expired.

Balloon Rental
A balloon rental is used to improve cash flow for the customer. The "balloon" is a lump sum rental that is deferred to the end of the agreement. The rationale is that the value of the equipment at the end of the agreement will be at least the amount of the balloon rental. For this reason balloon rentals tend only to be used for equipment with a predictable second hand value, e.g. cars, coaches, commercial vehicles, etc.

Off Balance Sheet
This is one of the benefits of operating leasing. The reason why "off-balance sheet" is attractive to some businesses is that it improves "gearing" which is the ratio between external borrowings ("debt") and the shareholders' capital ("equity"). Low gearing is generally regarded as good because, amongst other things, it means a lower vulnerability to increases in interest rates. It also improves "Return On Assets" which is the ratio between total assets in the business and profit. Clearly if the total assets reduce for a given level of profit then the ROA will increase.

Writing Down Allowance
The proportion of the asset's cost which the owner of the asset may charge against taxable income each year.

Residual Value
The estimated value of the equipment at the end of the agreement term.

Capital Raising
If you require financing for an unsuitable asset, or for project work (MBO etc), capital raising by Sale & Leaseback, Sale & HP Back will enable you to put the equity of your existing assets to good use.

Sale& Leaseback
This has exactly the same underlying facility as a finance or operating lease. The difference is that as you own the assets, you will be the supplier. The invoice you raise will be for the lower of current market value or your tax written down value.

Sale& HP Back
This has exactly the same underlying facility as hire or lease purchase. The difference is that as you own the assets, you will be the supplier. The invoice you raise will be for the lower of current market value or your tax written down value.

How to Apply.
Apply online: Trading Over 3 Years - Trading Under 3 Years

Download forms: Trading Over 3 Years - Trading Under 3 Years
(PDF version)

Click Here to request a copy of the correct forms via mail or fax.


Consumer Credit Licence No. 488590.

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Free Phone: 0800 358 3033