Asset Finance

Asset Finance

Asset finance is a type of finance used by businesses to obtain the equipment they need to grow. It usually involves paying a regular charge to use the asset over an agreed period, avoiding the full cost of buying outright. The most common types of asset finance options are ‘leasing’, ‘hire purchase’ or ‘sale and leaseback’.

 

Hire Purchase

A method of finance which allows you to acquire vehicles, equipment, machinery and other assets for your business use without having to pay the full purchase price of the asset up front.

At the end of the hire purchase term (providing payments have been made), the asset will be owned by yourself or your company.

The hire purchase finance agreements are made up into 2 parts:
1. Initial deposit
2. Monthly payments

This type of agreement can be very flexible and typical agreements can be typically structured over periods of 2 to 7 years depending on your budget and cash flow requirements. In addition the 3 parts can also be structured to best suit your own individual requirements.

Often hire purchase is also referred to as lease purchase.

Finance Lease

Works well for a broad spread of business assets as well as vehicles.

Key features & benefits:

Preserves cashflow – offers the obvious cashflow benefits of paying in instalments. Initial deposits can be as low as one repayment/rental down with the VAT spread over the term of the agreement.

Flexible – repayments/rentals can be structured according to your anticipated cashflow.

Tax efficient – the repayments/rentals can normally be offset against taxable profits.

Cost-effective – the Funder, as owner of the asset, claims the writing down allowances and passes them on to you in the form of lower repayments/rentals.

At the end of the lease you can continue renting the equipment by paying annual secondary repayments/rentals or sell the goods to a third party and retain up to 99% of the sale proceeds.

Sale & Leaseback

With sale and leaseback, you can immediately free the capital tied up in your fleet. You get cash injected straight into your company’s reserves.

Discuss asset finance with us

Direct Commercial Finance have ample years of experience dealing with asset finance options. Give us a call today to discuss your businesses requirements – 01474 823547