Types of Merlo machinery (at a glance)

Merlo’s agricultural portfolio is extensive and tailored to different tasks. The most relevant categories for UK farms include:

• Electric telehandler — ideal for low-emission sites and indoor work (stables, yards).
• Compact telehandlers — manoeuvrable for small yards and tight spaces.
• Medium-capacity telehandlers — versatile workhorses for general farm duties.
• High-capacity telehandlers — heavy-duty lifting for large bales, silage and contractors.
• Stabilised telehandlers — additional stability for lifting at height or on uneven ground.
• Rotating telehandlers — turret-mounted boom for 360° rotation and precise placement.
• Telescopic tractors & multipurpose tractors — combine telehandler reach with tractor-like features.
• Tool handler tractors & special machines — for specialised attachments and farm-specific tasks.
• Tracked carriers — low-ground-pressure carriers for sensitive land or steep terrain.
• Dumpers — for site work, stone and aggregate movement.

Each type brings distinct capability and associated price points — which affects finance choices and total cost of ownership.

Key Merlo features UK farms value

Merlo machines are known for several features which matter when evaluating return on investment and finance affordability:

• Rotating turrets: increase versatility by enabling load placement without moving the carrier, saving time and fuel.
• Suspension cabs: reduce operator fatigue and improve productivity during long shifts.
• Hydrostatic transmission: offers smooth acceleration and excellent control for precision tasks.
• Multifarmer models: combine telehandler reach with agricultural functions, reducing the need for multiple machines.
• Tracked carriers: allow work on wet or conservation-sensitive land with less compaction.

These advanced attributes typically increase the asset purchase price but also drive operational savings and reduced downtime — which are important when modelling finance affordability.

Common finance options for Merlo machinery

UK farms most commonly use two primary asset finance products to acquire Merlo machinery: Hire Purchase (HP) and Finance Lease. Each has distinct legal, tax and accounting consequences.

Hire Purchase (HP)

Under a Hire Purchase agreement you hire the machine from the finance provider and pay fixed instalments over an agreed term. Ownership typically transfers to you after the final payment (or a nominal final payment if a balloon was used). Key points:

• Ownership: transfers to the hirer at the end of the agreement (subject to final payment).
• Balance sheet: the asset and liability usually appear on your balance sheet (accounting treatment depends on accounting standards).
• VAT: VAT on the purchase price is usually payable upfront by VAT-registered businesses or can be deferred with certain HP structures depending on the supplier and finance provider.
• End-of-term: own the machine outright (subject to final payment) — good for businesses that want long-term ownership.

Finance Lease

With a Finance Lease the lender purchases the asset and leases it to you for a fixed term. You pay rentals for the term and may have an option to purchase at the end for market value or a nominal sum. Key points:

• Ownership: typically remains with the lessor during the lease term; you have use of the asset.
• Balance sheet: accounting treatment can differ (operating vs finance lease rules under accounting standards), with tax benefits for some structures.
• VAT: VAT is typically due on each rental payment (not always on the full purchase price upfront) — useful for cashflow.
• End-of-term: options usually include returning the machine, purchasing at agreed residual, or negotiating a renewal.

Other finance routes

• Operating leases: effectively rental arrangements with no ownership intent — attractive if you want to refresh machinery regularly.
• Asset refinance: re-financing existing machines to release cash.
• Chattel mortgages: secured loans where ownership transfers from day one but the lender holds a charge until repayment.
• Bank loans or agricultural mortgages: suitable if you prefer unsecured or longer-term property-secured borrowing to purchase machinery.
• Manufacturer and dealer finance: Merlo dealers often have partnerships offering competitive HP or finance lease packages, sometimes with promotions and fixed maintenance packages included.

Matching finance to machine types and farm needs

Choosing a finance product depends on how you expect to use the Merlo machine, your cashflow profile, tax position and replacement strategy. Consider the following guidance:

Short-life, high-use fleet (contractors, hire fleets)

If you want to refresh the fleet frequently or offer machines for hire, an operating lease or short-term finance lease makes sense. These reduce capital ties and avoid long-term ownership obligations.

Long-term ownership and resale value (family farms)

For farms that plan to keep machines for many years, Hire Purchase is often preferable because you will own the asset at the end of the term, potentially realise a residual sale price later, and avoid ongoing rental costs.

Seasonal repayment alignment

Many lenders can structure HP or lease repayments to be seasonal — lower payments during lean months and higher after harvest. This alignment greatly eases cashflow stress for arable and horticultural enterprises.

Tax-efficient structures

Depending on your tax position, leasing can sometimes be more tax-efficient because rental payments are allowable expenses; speak to your accountant to identify the best structure for capital allowances, annual investment allowance (AIA) and corporation tax planning.

Structuring a finance package — commercial considerations

When negotiating a finance package for a Merlo telehandler or tracked carrier consider these commercial elements:

• Term length: match to useful life — 3–7 years for machinery is common, but high-capacity units might be structured longer with a balloon payment.
• Balloon/residual finance: lowers monthly payments by deferring a final lump sum. Useful if you expect to refinance, trade-in or sell at end of term.
• Seasonal payment profiles: ask for seasonal or harvest-based payment schedules to reduce pressure in lean months.
• Early settlement terms: check penalties and whether residuals are fixed or market-based.
• Maintenance inclusion: consider including servicing, wear items and warranties into the package to stabilise operating costs.
• Trade-in and upgrade clauses: some dealer finance offers include flexible trade-in terms to upgrade mid-term — useful for high-utilisation fleets.

Case studies — real-world examples (hypothetical)

Eligibility, documentation and typical lender checks

Finance providers will usually request a set of documents and perform credit checks. Typical requirements include:

• Proof of identity and address for directors/owners;
• Up-to-date business accounts, management accounts or farm records;
• Tax returns and VAT returns where applicable;
• Cashflow forecasts showing ability to service payments;
• Details of existing secured lending and outstanding liabilities;
• Quotations or invoices for the Merlo machine and attachments;
• Details of insurance arrangements and proposed maintenance plans;
• Details of use (owner-operated, contract hire, rental) and any anticipated hours or duty cycles for wear assessment.

Comparing Hire Purchase vs Finance Lease — practical checklist

Practical tips to negotiate the best Merlo finance deal

1. Get multiple quotes: compare dealer finance, independent asset lenders and your bank.
2. Negotiate bundled services: get maintenance, tyres and warranty included if possible — it simplifies budgeting.
3. Ask for seasonal profiles: align payments with your income cycle to avoid overdraft use.
4. Check early settlement terms: flexible settlements allow refinance later if rates fall.
5. Understand the residual: if a balloon is used, know how you will handle it at term-end.
6. Use a specialised broker: brokers like Gable Asset Finance can access wider panels of lenders, structure blended deals and negotiate terms on your behalf.

Common pitfalls to avoid

• Focusing on monthly payments alone without modelling total cost of ownership;
• Ignoring warranty exclusions and expected wear & tear costs;
• Failing to include insurance and servicing in cashflow projections;
• Tying repayments to fixed monthly amounts without considering seasonal revenue swings;
• Not checking the finance provider’s repossession and default terms — always know the consequences of missed payments.

Frequently asked questions (FAQs)

Can I finance attachments and bespoke fittings on a Merlo telehandler?

Yes — finance packages can include attachments and optional extras. Ensure the quote itemises these so the lender values the full specification.

Is VAT recoverable on Merlo machinery?

VAT recovery depends on your VAT status and how the asset is used. VAT-registered businesses may reclaim VAT on purchases used in taxable activities. Leasing spreads VAT across rentals. Confirm with your accountant.

How long does finance approval take?

Timescales vary: dealer and specialist lender approvals can be completed within a few days for straightforward cases; more complex applications may take 1–3 weeks. Providing complete documentation speeds the process.

What happens if the machine is written off?

Comprehensive insurance with agreed value is vital. The insurance pay-out typically settles the finance early; check for any shortfalls and whether gap insurance is appropriate.

Can I trade-in my Merlo machine before the term ends?

Often yes — many dealers and funders allow early trade-in or refinance, though terms and any outstanding finance must be settled. Pre-agreeing an upgrade pathway can make this smoother.

Why use a specialist broker like Gable Asset Finance?

Specialist agricultural finance brokers bring sector knowledge, lender relationships and structuring expertise. Gable Asset Finance can:

• Match your Merlo requirement to lenders who understand farm cashflow and residual values;
• Structure blended finance (e.g. mortgage top-up + HP + overdraft) to meet capital and working needs;
• Negotiate seasonal repayment profiles and maintenance inclusion;
• Prepare lender-ready cashflow models and documentation to accelerate approvals;
• Advise on tax, VAT and capital allowance impacts in partnership with your accountant.

Conclusion — making the right purchase and finance choice

Merlo telehandlers and tracked carriers deliver capability, safety and productivity for modern UK farming operations. Finance makes these machines accessible without draining capital, and the right product — whether Hire Purchase, Finance Lease or an operating lease — should be chosen based on ownership intentions, cashflow seasonality, tax position and total cost of ownership.

Plan carefully: calculate TCO, model repayments with conservative revenue assumptions, include insurance and servicing, and negotiate residuals and seasonal profiles. Use specialist advice to secure terms that reflect the agricultural reality — and remember that bundling maintenance and warranty into finance can significantly reduce operational risk.