Assets such as machinery and vehicles may be used as security to gain funding. This may be either for items in which the business has some equity or for the purchase of new equipment.

Benefits:

  • Can release cash tied up in assets already in the business
  • Fixed costs
  • Provides an additional credit line
  • Huge flexibility in the assets that can be funded

There are four types of asset finance available:

  • Fixed term rental. Payments are made in order to use equipment over a fixed period of time. This type of agreement is suitable for equipment that has a short or medium life and hire periods of 2 to 5 years are usual.
  • Finance Lease. Payments are made to hire equipment or vehicles for an agreed period of time. These agreements are typically for assets that have a longer life and rental periods of 2 to 5 years are usual. The equipment or vehicles are sold at the end of the agreement term and, depending on the sale price, your business may receive a rebate.
  • Operating Lease. Similar to fixed term rental and can be used by educational establishments as well.
  • Hire Purchase. Payments are made to hire equipment or vehicles for an agreed period of time with the option to purchase them at a pre-agreed amount at the end of the hire period.

A huge range of equipment and vehicles can be used or purchased through asset finance from coffee machines to an office fit out, from storage to vehicles, plant and equipment.