In a hire purchase agreement, the lender purchases an asset, a piece of equipment or machinery and grants you, the borrower or hirer, the right to use it immediately and to buy it over time through progressive instalment.
The instalment include both interest and principal payments so that once the final payment is made, you will own the asset outright. A hire purchase agreement will allow you to spread out the payment of a large asset over time, avoiding the one time cash outlay that a large investment would normally create.