Asset finance is a funding solution enabling a business to purchase new equipment or refinance existing capital assets such as commercial vehicles and machinery over a specified period. Utilising asset finance is an ideal way to invest in business growth for businesses of all sizes.
Types of Asset Finance
There are a number of options available briefly summarised below:
- Hire Purchase – fixed monthly repayment terms and you own the asset on completion
- Refinancing – restructure an existing agreement or release capital based on the assets value
- Sale and HP back – your assets are purchased at an agreed value and financed back to you over a fixed period
- Finance Lease – enables you to obtain plant and equipment with no ownership issues other than maintenance and insurance with the option to extend the rental period at the end of the primary lease term
- Operating lease – short term lease in comparison to the useful life of the asset, based on the difference between the original price and the residual value at the end of the agreement
Advantages of Asset Finance
Asset finance is a cost effective alternative to purchasing an asset outright. Generally all equipment is considered with flexible contract periods. It offers a simple and flexible solution to business growth without the requirement to tie up working capital. There may also be associated tax advantages in asset finance.
Asset finance is suitable for virtually any type of business regardless of its size.