Purchasing new machinery or replacing existing equipment? We can help you find the Asset Finance option that is right for you.
Asset Finance
An asset is an item of property that has intrinsic value. Buildings, vehicles, and equipment are typical examples. Businesses generally use assets to assist their day-to-day operations. However you may also use them to pay off debts, secure a loan, or meet a commitment.
Asset finance leverages the value of assets such as vehicles, buildings, and equipment. When you need such assets, but don’t want to make a large cash payment to buy them outright, such finance can support your purchase. It does this by spreading the cost over time. You make smaller, regular payments during a fixed term. Fees and interest are charged in addition to the cost of the asset. You have full use of the asset throughout the term.
The main types of Asset Finance include:
- Hire Purchase
- Finance or Capital lease
- Equipment or Operating lease
- Contract Hire
Funding
£1000 to £7.5m
Repayment Terms
6 months to 5 years
Typical rates?
Can depend on Asset/contract type
All interest rates quoted are indicative only as rates will only be confirmed based on the risk profile for each deal. Risk category associated with the deal. This is based on primarily debt survivability and security available for the loan
Advantages of Asset Finance
Access to a high standard of equipment that you might not be able to afford otherwise
Interest rates on monthly instalments are usually fixed
Typically less risky compared to bank loans – if you can’t make payments you’ll lose the asset but not, for example, your home
The leasing company carries the risk if the equipment fails or breaks down
As long as you pay regularly, the agreement can’t be cancelled
It’s widely available
Things to be aware of…
You can’t claim capital allowances on a leased asset if the lease period is less than 5 years (or 7 years in some cases)
It can be more expensive than buying the asset outright
Some long-term contracts can be difficult to cancel early
You may have to pay a deposit or make some payments in advance
