The smarter way to find Asset Finance
What is asset finance?
Asset finance releases cash against existing assets that your business owns or it can be used to access assets without paying any upfront costs. In the second case, the cost is taken on by the lender and you will pay this back in regular instalments with interest added to the amount.
Leasing, hire purchasing and asset refinancing are well-known examples of asset finance.
Hire purchase is when your business intends to own the asset at the end of the repayment period. Leasing is when the funder continues to own the asset but you have use of it. Asset refinancing is a way of releasing cash that is tied up in an asset you own.
Why choose asset finance for your business?
Asset finance allows your businesses to access high-cost equipment that you may not be able to afford in any other way.
It is typically offered with terms fixed in advance, so you know exactly how much you are paying each month. It also frees you from the risk should anything go wrong, as it is usual for the leasing company to accept the risk of equipment failure and repair.
For expensive equipment or vehicles, it allows your business to avoid tying up a huge amount of cash in your investment. Instead you can pay for it over a term that reflects how long you foresee using it for.
Start-ups and SMEs in a wide range of sectors use asset finance to hire or purchase things worth anything from a few thousand to a few million pounds.
Where can you find a specialist asset finance provider lender?
At Financer.co we can partner you with many asset finance providers.
When you apply online for asset finance with us, we match your business needs with providers who understand your sector and have plenty of insight into the help that your business requires.
What can you use asset finance for?
Asset finance can be used to lease an asset so that you are not responsible for its servicing or for paying in instalments towards ownership of an asset but being able to use it immediately.
It can also be used for raising finance by using assets you own as a security. This is, in effect, a secured loan.
What else should you know about asset finance?
It’s important that you are clear whether you are interested in hire purchase or leasing an asset.
Typically, both place the responsibility for servicing or repair with the asset finance provider. This can offset some of the interest that accrues as you repay the financing.
With hire purchase finance, once you have completed your repayments you will own the asset outright. This means that for tax purposes you can usually claim capital allowances.
But hire purchase will often require a deposit to be paid, unlike leasing. This may be somewhere between 10 and 20 percent of the total value of the asset.
Another factor to consider is depreciation. Some assets lose their value much faster than others – although this does offer you benefit of claiming for the depreciation on the asset for on your tax return.
Both leasing and hire purchase can be obtained much quicker than bank loans, with many initial decisions being made in less than 24 hours and agreements in place shortly after this.
Also, because the asset itself acts as your security, most asset finance is offered on an unsecured basis, but guarantees may be required for fledgling businesses or those who have already borrowed heavily through other sources of finance.
Asset finance is usually offered with fixed interest rates and fixed payments, so you know exactly what you are committing to. Similarly, it is usually the case that you can agree on a time frame for repayments – for most asset hire purchase agreements this will be between one to five years.
Asset finance is available from alternative finance providers, and you can apply to a number online today.
Most common questions