Coronavirus Business Interruption Loan Scheme (CBILS)

Coronavirus Business Interruption Loan Scheme (CBILS)

Asset Finance

Asset Finance

Property Finance

Property Finance

What is Asset Finance?

Asset finance is a widely used method of purchasing business related equipment and assets, spreading the cost over a pre-agreed period of time

It is used by new start companies right though to large, corporate entities and everything in between. It’s a tool to help your company expand.

The two main reasons a business invests in new equipment is it either makes you or saves you money. Unfortunately not everyone has the capital in reserve to make these improvements, therefore holding the company back or you have the required cash but would prefer to keep hold for unexpected expenses.

 

Asset finance is the perfect solution

  • Spread the cost between 1-7 years
  • Often no need for a large initial outlay – protects your cash flow
  • Potential tax benefits
  • The asset acts as its own security in most cases
  • Keep your capital in the business to help with growth or unexpected costs
  • Much quicker return on your investment
  • Fixed repayments for peace of mind budgeting
  • Does not affect your existing credit lines (with the bank for example.)
  • All types of equipment can be finance this way – IT equipment, Catering, Furniture Security, Software, fit-outs etc. (soft assets.)
  • CNC machines, cars and commercial vehicles, cranes, medical/testing equipment, production and manufacturing and so on
  • New and used equipment can be funded
  • Approval turn-around times within 24-48 hours

How does it work?

Asset Finance falls into 3 main categories:

Hire purchase

Mostly used to fund vehicles and harder assets, this is an on-balance sheet transaction. The VAT is paid upfront (and then can be reclaimed.) and ownership is secured at the end of the term for a nominal fee. Repayments are fixed for the duration of the agreement.

Lease rental

More common for the purchase of softer assets such as IT, furniture, catering, office fit-outs and so on. This is an off-balance sheet transaction and has potential tax benefits by offsetting 100% of the costs against your future profits. Repayments are fixed for the duration of the agreement.

 

Asset refinancing

This is a great way to release capital from existing unencumbered assets whilst still retaining usage. The cash raised can then be used for any business purpose from purchasing new assets, stock, general cash flow anything else that would benefit the company. This can also work with current finance agreements whereby they are re-scheduled with a new lender – this releases capital at the same time as reducing your repayments.

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