Who owns the asset

This determines everything, and the answer is usually not what the balance sheet suggests.

On hire purchase, the finance company owns the asset until the last payment. On a lease or contract hire, the funder owns it throughout and takes it back at the end. In each case the company has possession, not ownership — which means the asset is not really available to creditors, and a sale of the company does not transfer it either.

What happens on default

Agreements usually allow termination on missed payments, on insolvency, and often on a change of shareholder. Business assets can be repossessed far more quickly than consumer ones, so it happens fast.

Termination normally triggers the remaining rentals becoming payable, and after the asset is sold the company is pursued for the shortfall. That shortfall is routinely much bigger than directors expect — it is the number that catches people out.

Change of control clauses

Many agreements let the funder terminate if the shareholder changes. This has to be dealt with before completion rather than discovered afterwards, and it is one of the things we check as a matter of course.

Where a sale fits

Arrears, termination balances and shortfall claims across vehicles, plant and equipment are within scope. Send us the agreements themselves rather than just the arrears figures — the terms vary far more than the monthly payments suggest.