Infographic: What is Asset Finance

Infographic: What is Asset Finance image

Asset finance is a popular choose with UK SME businesses who need to purchase high value equipment to help them grow. It usually involves the customer (lessee) paying for use of the asset over an agreed term. This helps the business to avoid buying it outright, eliminating large cash outflows.

According to the Finance & Leasing Association (FLA), £33 billion worth of asset finance was provided to british businesses in 2018.

There are two main types of asset finance.

Leasing
The leasing company purchases the asset on behalf of the customer. The customer pays a rental for the access and use of the new equipment, without owning it. The leasing company owns the asset.

Hire Purchase
Similar to leasing, the finance company purchases the asset on behalf of the customer. The customer regularly pays to use the equipment over a term specific term. The only difference is that the customer owns the asset after final payment is made.

Perfect for most sectors including Construction, Manufacturing, Engineering, Agriculture, Printing, Waste Management, Transport and logistics.

Key benefits include:
• Access to new equipment
• Good for cash-flow
• Tax advantage
• Flexible funding option
• Can be obtained quickly
• Clear budget management

What is Asset Finance?

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Jamie Moorcroft Author
by Jamie Moorcroft

Money Writer, Director and Co-Founder

Updated on: September 03, 2021

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