Hire Purchase / Block Discounting
Affordable Loans for Equipment / Hire Purchase Agreement
- Finance up to 90% of equipment/HP agreement
- 1 - 8 Years Tenure
- 2.92% - 4.5% Per Annum (Flat Rate Interest)
- Secure a loan for machinery purchase. Finance new or used equipment to grow your business. Contact our advisory team today for tailored solutions!
Equipment Choice
Up to 90% Funded (New or Used)
Fixed Repayments
Predictable 1–8 Yr Cash Flow
Asset Ownership
Full Legal Title Transferred
Key features
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Finance Up to 90% of Equipment & Vehicles
Finance up to 90% for new machinery and up to 80% for used machinery, minimizing the initial capital outlay for businesses.
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Fixed Monthly Payments for Predictable Cash Flow
Hire purchase loans offer fixed monthly installments, making budgeting easier, especially for businesses in the vehicle rental and equipment leasing businesses.
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Own Your Asset at the End of the Term
Unlike leasing, hire purchase allows businesses to own the asset after completing all payments and this provides long-term cost savings compared to renting equipment indefinitely.
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Maximize Tax Savings with Depreciation Benefits
Interest paid on hire purchase loans is tax-deductible, and businesses can claim depreciation on financed assets, providing valuable tax relief.
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Finance a wide variety of equipment/machinery
Construction machinery such as lorries, excavators, cranes, forklifts, generators etc. Medical/Biotech machinery such as Dental chairs, Ultrasound, X-ray etc. Food production machinery such as blenders, grinder, mills, crushers, oven, grills etc. Vessels such as pleasure crafts, tugs and barges, dredgers etc.
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Convert HP Agreements into Immediate Cash (Block discounting)
With Block Discounting, businesses can sell hire purchase receivable to generate upfront cash, improving liquidity and allowing for reinvestment into new inventory or expansion.
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Scale Your In-house Financing with Block Discounting
The more HP Agreements you generate, the more you can discount, scaling your in-house financing exponentially. Funds can be drawn in blocks to match operational needs. Block Discounting typically offers lower interest rates than in-house loans, allowing businesses to still profit from the interest spread while receiving upfront capital. Plus, the Rule of 78 ensures an interest rebate when you settle block loans early.
Hire Purchase Act & Asset Title Structuring
Under the Singapore Hire Purchase Act (Cap. 125), legal ownership remains with the financier until the final installment and nominal option-to-purchase fee are cleared, while economic possession, operational usage, and risk reside with the hirer.
Tax Capital Allowances (IRAS Section 19/19A)
The hirer can claim Section 19A Capital Allowances (100% write-off in 1 year or 3-year write-down) on qualifying plant and machinery, while deducting all hire purchase interest expenses against taxable income.
Block Discounting Mechanics (Auto & Machinery Dealers)
Dealers providing in-house financing to retail buyers bundle multiple consumer HP contracts into a "block" and assign future receivable rights to a financial institution at a discounted present value.
Dealer Spread Arbitrage: Dealer charges retail customer 6.0% flat; dealer discounts the block with an institutional funder at 3.5% flat -> Dealer pockets a 2.5% net profit margin upfront while offloading cash flow risk.
Rule of 78 (Sum-of-Digits) Formula
Used to calculate statutory interest rebates upon early settlement: Rebate = Total Interest * (n(n+1)) / (k(k+1)), where n = remaining months, k = original loan tenure in months.
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