Asset Finance is used by businesses to buy the equipment they need to grow
- Preserves cash
- Spreads the costs further
- Fixed payments for easier budgeting
- Immediate access to new equipment
- Enables business growth
You may not have the cash available to purchase the asset outright, or you may want to spread the cost of the equipment over its usable life.
There are three main types of Asset Finance – Hire Purchase, Leasing and Asset Refinance.
Hire Purchase lets you spread the purchase cost of an asset, like a vehicle or equipment, over a longer period with fixed regular payments.
It can be flexed to suit your business with flexibility on the cost of your deposit, regular monthly payments and the final lump sum.
Hire Purchase is a good option for any business that wants to spread the cost of equipment over it’s usable life and ultimately wants to own the asset outright.
There are two main differences between a Finance Lease and Hire Purchase.
Firstly, during a Finance Lease, the business is given full ownership and responsibility of the asset (so must insure and maintain it etc).
And secondly, the business is never given the opportunity to own the asset, even at the end of its usable life.
Other than this, it works very much like an Hire Purchase agreement; the asset finance provider leases the equipment to the business for a fixed period, with the business making regular payments for the use of it over this period.
Leasing is a good option for any business that wants to spread the cost of equipment over its usable life but doesn’t want to own the asset outright.
Refinancing offers you the best of both worlds; you can still use the asset in question at the same time as capitalising on a cash injection straight into your business.
By refinancing assets you can fund a range of projects that would not easily be financed by other methods, such as acquiring another company, buying out a business partner or generating cash to fund improvements to your work environment.
There is a lender willing to refinance just about asset, of any age up to a maximum of 90% of it’s value – subject to professional valuation.
Asset Refinance is a good option for any business that wants to generate additional working capital and simplify their debt structure by consolidating all of their existing repayments.