Finance Your Asset

As the name suggests, the term Asset Finance refers to the various financing options that are available to you when purchasing a capital asset. This could be anything from a single car to a fleet of vehicles, a piece of plant or specialist machinery, or even a full production line.     

The main types of asset finance available are:

  • Hire Purchase
  • Leasing
  • Contract Hire
  • Sales & Lease Back

Choosing which option is best for you will depend on a number of factors, including the type of asset you are buying, its value and remarketability, as well as the likely value of the asset in the future. The length of time over which you wish to spread the payments will also be a consideration, as will the different tax considerations associated with each of the different types of finance.

Typically finance companies will consider asset finance of one form or another so long as the asset in question meets three basic criteria.  The asset must be:

  • Moveable
  • Re-saleable
  • Identifiable

Obviously some assets may not meet all of these requirements, and in some of those cases there are specialist lenders who will still nevertheless consider providing finance. In the main though, it will be easier to find funding if these basic criteria are met.      

Both new and second hand assets can be financed. There are no financial limits on what can be handled and some lenders will help with assets costing as little as £1,000. A deposit of some kind is required in most cases, although the amount of this will vary depending upon the asset being financed and your own circumstances, with things like the length of time you have been in business being taken into consideration.

Given the range of asset finance options available and the number of different lenders in the market, it makes sense to seek expert advice. This will ensure you get things right first time, by getting the deal that is most appropriate for you and the asset you are buying as well as helping you understand the cash flow, accounting and tax implications of the finance method you choose.