Asset finance is a funding solution that raises capital for purchasing new assets outright or refinancing existing assets. Whilst many businesses use bank loans or overdrafts, asset finance companies can offer more direct and specialised funding to assist with the growth of your business and a much more flexible way to spread the purchase cost over an asset’s economic life.
Asset finance comes in many forms and we will put you in touch with the right lender to meet your individual needs. Products such as hire purchase, finance leases and operating leases provide the means to purchase new equipment without tying up working capital while asset refinance solutions can release cash against the value of existing business assets.
How does asset finance work?
All you need to do is…
• Find the asset you wish to purchase
• The asset finance company surveys the asset to ensure loan to value
• The asset finance purchases the asset on your behalf
• You enter into an agreement to hire it from the funder at an agreed rental over a set period
• At the end of the agreement you have the option to retain use and possession of the asset at a price agreed at the start of the lease period
You can sell the equipment for and on behalf of the funder and retain the vast majority of the sale proceeds as a rebate of rentals.
How will asset finance benefit your business?
• Low up-front costs – you only have to pay a small deposit and benefit from the use of the asset immediately
• Flexible repayment structures – repayments can be tailored to fit your cash flow
• Fixed or variable interest rate options – you decide which suits your business
• Tax benefits – as well as reclaiming the V.A.T, you may also be able to claim capital allowances and also offset repayment interest against your businesses profits
• Equipment can be leased for a short period if only required for a limited time
• Finance leases and operating leases avoid the issues relating to asset depreciation
• Equipment can be purchased domestically or overseas through asset finance
• Asset finance avoids the need to sell at a second-hand price when upgrading the asset