No matter your industry, to stay ahead of the competition you need all the resources available that can help you grow – whether that’s a fleet of vehicles, specialist equipment, or the latest tech in your field.
However, it’s not always within your budget to purchase these resources outright, especially when they require handing over a large sum of money in one go. That’s what asset finance was designed for.
Here, we go into more detail on what asset finance is, how it works, and the types of asset finance you can choose from to achieve your business goals.
Asset finance is a financial solution which aids businesses in securing funds to purchase assets that are essential to maintaining their competitive edge or driving expansion.
With the help of an asset finance loan, you can avoid having to divert cash flow from other areas of your business to afford the upfront costs and instead spread the sum across regular instalments over a fixed period.
Asset financing can come in handy for many things – from office equipment and technology to machinery, and even vehicles.
As well as safeguarding your business capital for other needs across the organisation and granting you access to the latest technology in your field, asset finance enables you to be flexible. You can choose from several different financing options so that your loan agreement matches your specific requirements; plus, some asset finance types let you save on tax, by claiming back VAT for example.
Once you’ve identified the business need for a particular asset, you will partner with a lender either directly or through an intermediary to finance it, then pay the instalments you’ve agreed upon, plus any interest. At the end of the fixed term, you will either gain full ownership of the asset, or return it to the lender, depending on what type of asset finance you’ve chosen.
We understand businesses have varied needs, so we offer a range of asset finance solutions tailored to different budget and operational requirements. Types of asset finance include:
Hire purchase – hiring with the aim of owning an asset outright at the end. In addition to the initial deposit and monthly repayments, at the end of an agreed term, a nominal fee may be required if the business wants to own the asset. Businesses that are looking to build up the value of their asset portfolio often choose this option.
Finance and operating leases – similar to hire purchase, but you won’t have the option to own the asset outright at the end of the term. We would make the purchase and lease it to you for a set term. At the end of the fixed period, you can give back the asset, extend your lease, or upgrade to newer equipment. This solution is popular with companies which require greater flexibility, or work in an industry where innovation is fast-paced.
Refinance – releasing equity in existing assets to free up cash. Instead of purchasing new equipment, you’re getting cash against assets that already belong to you or with another lender, with the aim of reinvesting the funds into other business areas. This is a viable option if you need more liquidity to grow the company or make improvements to operations.
Asset financing can span a truly wide range of assets across diverse categories. Some lenders might limit their asset finance options to certain asset types, or cover a broader selection of items.
Some examples of what asset financing can fund include:
Transportation– from expanding a fleet to switching to electric vehicles, this can cover anything from company cars to larger commercial vehicles.
Specialist equipment – such as non-industry-specific technologies, such as IT and telecoms, as well as security and leisure equipment, waste management tools, medical equipment, or other industry-specific essentials.
Construction – asset financing can also be used to over various types of construction equipment, including bulldozers, cranes, excavators, compactors, and more.
Agriculture – you can also use this funding for essential farming supplies, whether it’s tractors, combine harvesters, and balers, or grounds maintenance tools.
Energy – helping to achieve sustainability goals, like reducing a business’ carbon footprint or reaching a net zero goal.
We know every business is unique, which is why our asset finance offering can be tailored to your individual needs.
Asset finance is an efficient way to manage your business finances, by protecting your core cash flow and allowing you to spread the cost of innovative equipment essential for staying competitive.
Contact our team to learn more about making your business go further with our asset finance solutions.
T&Cs will apply, subject to status and affordability. Any asset used as security may be at risk if you do not repay any debt secured on it.