Asset finance is a financing solution that enables businesses to acquire assets for their operations without the need for large upfront capital outlay. It involves obtaining funding to purchase or lease assets, such as equipment, machinery, vehicles, or technology, which are then used by the business to generate income. Asset finance allows businesses to access the essential assets they need to operate and grow, while spreading the cost over a period of time.
Asset finance typically takes two main forms:
Hire Purchase (HP): With hire purchase, the business pays a deposit upfront and makes fixed monthly payments over an agreed-upon period. Once all payments are made, ownership of the asset is transferred to the business.
Leasing: Leasing allows businesses to use the asset for an agreed-upon period in exchange for regular lease payments. At the end of the lease term, the business can choose to return the asset, extend the lease, or purchase the asset at a predetermined price.
Instead of tying up valuable working capital in purchasing assets outright, asset finance allows businesses to preserve their cash flow. This enables the business to allocate capital to other areas of the operation, such as expansion, marketing, or day-to-day expenses.
Asset finance provides flexible financing options tailored to the specific needs of the business. Whether it's acquiring new equipment, upgrading technology, or expanding the fleet, asset finance can be structured to match the useful life of the asset and the cash flow of the business.
With fixed monthly payments, asset finance enables businesses to have predictable budgeting and cash flow management. This makes it easier to plan for future expenses and ensures that the cost of the asset is spread out over its useful life.
Leasing or financing assets allows businesses to access the latest equipment and technology without the need for large upfront investments. This ensures that businesses can stay competitive, improve productivity, and take advantage of technological advancements in their industry.
In many cases, asset finance may offer tax advantages for businesses. Monthly lease or hire purchase payments are often tax-deductible as a business expense, reducing the overall tax liability.
Our hire purchase option allows you to spread the cost of acquiring assets over a fixed period while retaining ownership of the asset at the end of the agreement.
Operating leases provide flexibility, allowing you to use the asset for a defined period without the responsibility of ownership. At the end of the lease term, you can choose to upgrade to newer equipment, extend the lease, or return the asset.
Finance leases enable you to benefit from the use of the asset while the finance company retains ownership. At the end of the lease term, you can often choose to purchase the asset at a pre-agreed price.
As an established commercial finance broker, we have built strong relationships with a wide network of lenders specialising in development finance. This allows us to access a diverse range of funding options, ensuring that we can match your project with the most suitable lender. Our extensive network enables us to negotiate competitive interest rates and favourable terms on your behalf, maximising your chances of securing the funding required for your development venture.
Asset finance can be used for various types of assets, including equipment, machinery, vehicles, technology, office furniture, and more. The specific assets eligible for financing will depend on the lender and the nature of your business.
The repayment period for asset finance can vary depending on factors such as the type of asset, the lender's terms, and your business's financial circumstances. Repayment periods can range from a few months to several years.
Hire purchase involves making fixed monthly payments over an agreed-upon period, with ownership of the asset transferring to you once all payments are made. Leasing, on the other hand, allows you to use the asset for a defined period in exchange for regular lease payments, with options to return, extend, or purchase the asset at the end of the lease term.
Yes, asset finance can be available for start-up businesses. Lenders may assess the viability of the business and the asset being financed, and they may require additional security or higher deposit amounts.
It depends on the specific terms of your asset finance agreement. Some agreements may allow for upgrades or replacements during the term, while others may require the agreement to be settled before making any changes. It's important to discuss this with your lender before finalising the agreement.
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