Asset finance could help you unlock the funds tied up in existing assets or hire new equipment with the option of buying them at the end of a contracted period.
Asset finance is a term used to describe a loan for which you use existing assets or additional assets as security against the loan. By using existing assets, you could access money that is tied up in existing business collateral, such as property or land. Additional assets are new purchases, for example, plant, vehicles and equipment, which you typically hire with the option to purchase at the end of the agreement.
Staying ahead of the competition is vital for business success but funding commercial equipment, vehicles or plant can be incredibly costly. Many alternative funding providers offer asset finance as a way for businesses to invest in the latest equipment without incurring significant cash flow problems. In whichever sector you operate, be it construction, manufacturing, logistics or printing, investing in new assets could be more affordable than you think.
In most cases, you can spread the cost of equipment over the lifetime of the purchase. Typical arrangements include hire purchase and equipment leasing. Operating leases are another form of asset finance but you do not have the option to own the equipment once the rental contract has ended. Alternatively, asset refinancing gives you the option to release funds tied up in existing assets.
A hire purchase arrangement offers a simple way to buy new business assets on credit. You repay the amount borrowed in instalments. Once the loan has been repaid, you will own the asset.
With equipment leasing, also known as lease finance, you can rent equipment for an agreed term. This form of asset finance allows you to use the equipment by spreading the cost over time. You will not necessarily own it at the end of the term. However, you may have the option to extend the lease agreement, purchase the equipment outright, upgrade it on a new lease or simply return it.
An operating lease is a short-term rental agreement and you will not own the equipment. The lender is responsible for maintaining the equipment, which is typically loaned to other businesses once it has been returned at the end of each term.
If your business has capital locked in valuable commercial assets, such as property or land, it can be released via a refinancing arrangement. The asset will act as security against the loan. The amount you can borrow is dependent on the value of your asset.
Asset finance enables you to grow your business using latest equipment, vehicles and technology. You can choose to invest in new equipment or release funds tied up in existing assets. Funds can be made available relatively quickly with transparent terms to ensure your budget is managed effectively.
If you’re looking to invest in new equipment, machinery or vehicles for your business, find out if you qualify for asset finance today! apply online now for a no obligation quotation.
To qualify for asset finance, you must operate a UK-based limited company with a turnover in excess of £10,000. The funds must be used for business use only.
If you do not meet these criteria, we offer a host of other business finance options that could suit the needs of your business.