The practical answer
Compare total finance cost with the value of retaining cash, while assessing the company’s ability to meet other commitments.
Use the same purchase price and include initial payments, instalments, fees, final obligations and expected resale. Separately model liquidity for tax, wages, suppliers and unexpected events.
Accounting and tax effects should be checked with the accountant. Neither cash nor finance is always best: the decision depends on the business’s cash position, investment needs and available terms.
Commercial finance is subject to status, lender approval and the specific asset and transaction. The right structure depends on the complete circumstances of the business.
What should I do next?
Have the asset details, supplier information and an outline of what the business needs ready. DCF can then discuss the requirement and identify which lenders may be suitable.
Read: Compare finance structures →