What is Asset Finance?

Using precious cash reserves to purchase capital assets can put pressure on your ability to fund ongoing growth. Purchasing business equipment and assets via an Asset Finance facility preserves your cash in that payment for the asset is spread over a set number of months.

There are different type of Asset Finance such as Finance Lease, Hire Purchase, Operating Lease, and Re-finance (known as Sale and Leaseback); each has different benefits and financial advantages.

You are in control of the process in that you identify and negotiate the purchase of the asset; the Asset Finance company will organise the finance deal.

Depending on the type of facility you take ownership of the asset or equipment at the end of the term can be yours for an agreed nominal fee, you can continue using it under a secondary rental agreement, or just hand the asset back.

What Can be Funded Via Asset Finance?

The type of assets which can be funded via an Asset Finance facility is very broad. Assets can range from general plant and machinery, business equipment, commercial vehicles, construction equipment, medical equipment, farm machinery, IT equipment; restaurant equipment; in fact there are Asset Finance providers for most types of asset purchases that a business is likely to make.

Who Can Get an Asset Finance Facility?

An Asset Finance can be approved for sole traders, partnerships, LLPs, and Limited Companies.

What Do You Need to Get an Asset Finance Facility?

• The provider will wish to assess your financial position by reviewing your Annual Financial Statements and Management Accounts. The providers will not want a full review of your business as a bank would but it need to be comfortable that you can afford the monthly commitment.
• You will need to provide full details of the asset to be purchased.

What Are the Typical Requirements, Terms and Conditions?

• The repayment period will be linked to the economic life of the asset
• Up to 100% of the value of the asset can be extended (excluding VAT which you will have to fund). As a deposit up to three months payments will typically be requested
• Amounts available can start at £1,000
• The provider will take the asset purchased as security for the facility so in many cases, depending on the strength of the business, no additional security will be required
• The interest rate charged will vary and is based upon the perceived level of risk

What Do I Do Next?

If you are looking for an Asset Finance facility, to ensure you get an offer which suits your requirements, get in touch with us to discuss the options available to you.