Benefits:

  • Low or No Deposits
  • 100% Tax Deductible
  • Easy Budgeting
  • Fixed Monthly Payments
  • End of Lease Ownership Options
  • 1-7 Year Terms (Hard Asset Only)
  • Borrow from £10k – £5m

What Can Be Financed?

In a nutshell, anything. But critically lenders place equipment into two different categories – Hard Asset and Soft Asset. Hard assets can be financed at slightly cheaper rates than soft assets, mainly given that hard assets have a much higher resale value and soft assets do not. Which of course in the event of default is important to a lender.

Hard Asset Examples:

  • Commercial Vehicles
  • Manufacturing Equipment
  • Engineering Equipment
  • Heavy Construction and Plant
  • Agricultural Plant and Machinery

Soft Asset Examples:

  • Audio Visual Equipment
  • Shopfitting
  • Beauty Equipment
  • Dental Equipment
  • Gym Equipment
  • Laundry Equipment
  • Waste Disposal Equipment
  • Furniture
  • Catering & Kitchen Equipment

The Process:

  • Apply Online Here
  • Submit any Financial Info Requested inc Equipment Details
  • Get Approved
  • Equipment Supplier Raises an Invoice
  • We Get Them Paid, You Get Your Equipment!

Asset Finance – What you need to know

Asset financing is a practice that can give your business access to business assets such as equipment, machinery, vehicles or other assets that your business may need to thrive. Like many financial services, it can seem relatively confusing to begin with, and there are a fair amount of different asset finance products for you to choose from. Here’s some more information to help you get to grips with the basics.

What Is Asset Finance?

Often, asset finance is associated with the purchase of machinery, equipment, vehicles or a plant (or something of a similar cost) for a business. Generally, companies and organisations who have the need or opportunity to grow their business, but do not have the funds to purchase these things outright themselves in the moment, will use this kind of finance. Alternatively, companies who do have the funds but would rather spread the cost over a longer period of time will opt for this kind of finance too.

In other cases, the term “asset finance” can refer to businesses using the assets they already own – such as existing machinery, equipment, vehicles or a plant – as a form of security against a new loan from an asset finance provider.

How Does Asset Finance Work?

For ease of understanding, asset finance works in a similar way to a mortgage. When you take out a mortgage, the lender will pay for the property and you’ll pay them back in regular instalments. In the same way, when you use asset finance, the lender will pay for the machinery, equipment, vehicles or plant that you need and you’ll pay them back in regular, agreed instalments.

What Does Asset Finance Include?

There are a number of different types of asset finance, so it’s a good idea to be aware of your options. Just remember to fully check over the terms and conditions of any agreement. Different providers’ conditions may vary from the descriptions given below.

Equipment Leasing

Equipment leasing involves your lender buying the equipment that you require and you renting the equipment for a regular fixed fee over a fixed period of time. Once this period ends, you will generally be given a few options. These often include:

  • Extending the lease
  • Upgrading the item
  • Buying the item at an agreed sum
  • Returning the item to the provider

Maintenance and servicing costs of the equipment fall down to the provider.

Hire Purchase

Hire purchase, sometimes referred to as “lease purchase”, sees a lender buy the equipment you need and retain ownership of this asset during the term of your agreement. You will lease the equipment from your lender for a fixed period of time. When the agreement comes to an end, you can buy the equipment outright with a final payment.

Finance Leases

A finance lease, otherwise known as a “capital lease”, is where your business will only ever rent the assets involved. This agreement generally lasts until the lender has recouped the full cost of the assets they have purchased to lease to you. You will not have the option of purchasing the asset at the end of the agreement. However, you may be able to secure a deal with your asset finance provider where you receive a set percentage of the final sale cost of the item.

Operating Leases

Operating is similar to finance leasing but is for more niche assets. It is generally used by businesses who require temporary use of a niche piece of equipment and have no interest in buying it outright. Put simply, operating leasing is like renting a piece of equipment for the short or medium term, with the cost of renting the equipment depending on how long you require use of the asset.

Asset Refinance

There are two main forms of asset refinancing.

  1. A company will use its assets as security against a loan. As long as you keep up with repayments, you’ll benefit from the loan and get to keep your asset at the end of the agreement.
  2. Asset based lending – a business sells an asset to an asset finance provider for an agreed lump sum. The business then leases back the asset from the finance provider, repaying the lump sum paid.

Is Asset Finance Regulated?

Financial services firms in the UK are regulated by the Financial Conduct Authority (or “FCA”). This is an authority that exists to ensure that the market works fairly for everyone – that includes businesses, individuals and the economy.

The Financial Conduct Authority covers financial services providers for regulated activities. This comprises a long list, but in this context will cover consumer credit activities. So, from an asset finance provider’s point of view, consumer lending, such as hire purchase for a car, is a regulated activity. However, business asset finance does not fall under this definition and is consequently not regulated by the FCA.

It is also important to bear in mind that many asset finance providers are authorised and regulated by the FCA for regulated businesses and will have likely adopted the same processes and practices across their full organisation.

What Is Considered an Asset for a Loan?

An asset is an object or resource that holds value. It is something that could be sold for cash equal to its value. Assets can be government owned, company owned or individual owned and can help their owner to either deliver their purpose or generate profit.

This may seem like a lot to take in, but it’s definitely worth knowing your options when it comes to asset financing. You never know when this process could come in useful for your business. If you do engage with asset financing, just make sure to stick to your agreed contracts, including agreed payments. This will prevent your business from experiencing financial trouble.

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Whatever your business need, the right kind of flexible finance is available to you. We’ll carry out a needs assessment based on your requirements and circumstances and advise on the loan products we can offer you. Our team are experienced, helpful, friendly- and they don’t speak in jargon!

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