What is Asset Finance?

Asset Finance involves obtaining funding for the purchase of a specific asset, or sometimes a pool of assets. The cost of the asset is spread over a pre-determined period.
The cost is spread over a set period, and the borrower only owns the asset after completing all payments. The lender has ownership security, and the borrower usually puts down a deposit to cover some risk.
  • Key Eligibility Criteria:
  • 6 months trading history
  • The business is a limited company
  • The asset is for business purposes
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Benefits at a glance

Lower Upfront Costs

Asset Finance enables businesses to acquire assets without the need for a significant upfront payment. This approach helps preserve cashflow for daily operations.

Access Better Equipment

Asset Finance offers businesses the chance to obtain superior-quality equipment that might have been financially out of reach. Additionally, it provides options to upgrade to newer technology at the end of the term.

Tax Benefits

Depending on the specific circumstances and the chosen type of Asset Finance, there can be tax benefits, such as deductions on lease or rental payments.

  • Most common industries:
  • Shipping and Logistics
  • Real Estate Developers
  • Commercial Vehicles
  • Manufacturers
  • Farmers and Agriculture
  • IT Consultancies
  • Construction

Types of Asset Finance

Various financing options enable businesses to acquire assets like equipment, machinery, vehicles, or property. Here are some options:

    • Hire Purchase (HP): The lender buys the asset for the business, and they repay in instalments over a fixed term.
    • Finance Lease: The lender purchases the asset and leases it to the business. Regular lease rentals are paid, and at the lease end, the business may buy, extend, or return the asset.
    • Operating Lease: Similar to a finance lease, it allows using an asset for a specific period. At the lease end, the asset is returned, and the business can opt for a new lease.
    • Asset Refinancing: Using an owned asset as collateral to secure a loan.
    • Sale and Leaseback: The business sells an owned asset to a finance provider and immediately leases it back.

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