What is Asset Finance?

Whenever businesses invest in tangible assets – anything from office equipment, printing, construction to manufacturing plant or from cars, coaches and trucks right through to aircraft – they usually need an affordable, secure means of finance.

That is exactly what the Asset Finance sector is all about. In fact, Asset Finance is the third most common source of finance for businesses, after bank overdrafts and loans. It is also of growing importance in the public sector.

Asset Finance:

• Funds almost 28% of all fixed capital investment, other than property and own-account software in the UK.
• Provides finance to around 20% of all SMEs, and to around 33% of SMEs that seek external funding
• Is particularly important in the manufacturing, construction, agriculture and transport sectors, throughout the whole of the UK

The two main forms of Asset Finance are Leasing and Hire Purchase

Under a leasing agreement, the leasing company or lessor buys and owns the asset. The customer, or lessee, then hires the asset, paying rental over a fixed period. At the end of the contract, the customer usually has a choice of extending the lease, buying the asset or simply returning it. Assets funded by this method are not deemed to be owned by the lessee.

Hire Purchase is a financing solution for companies wishing to purchase business assets. The customer pays an initial deposit, with the remainder of the balance and interest paid over a period of time. On completion, ownership of the asset transfers to the customer. From a tax perspective the asset is deemed to be owned by the borrower from the outset

Within these two principal areas are solutions that will fit more appropriately with the needs of your business, what the asset is required for and what your tax position is.

Sources of Asset Finance

Asset finance can be obtained direct from specialist providers, or indirectly through equipment suppliers and companies such as our own. We deal with specialists in these sectors who have access to the whole of the marketplace not just the captive lenders owned by your own bankers, which is often the route a lot of businesses take, sometimes at a cost.

Why not give us a call and outline your project and we can either help directly or alternatively introduce you to one of our Associates who can