Asset Finance companies lend against fixed and moveable assets, such as vehicles, plant, machinery and stock
The asset may be funded via a sale and leaseback arrangement or Hire Purchase agreement. This may be a new asset or an existing asset which can be refinanced. The wording of the lease will determine whether ownership of the asset remains with the borrower (on balance sheet) or with the lender (off balance sheet). Asset finance helps businesses spread the cost of significant capital expenditure rather than tying up capital.
You can use a range of assets to raise finance for your business either independently or as a combined package (known as asset based lending) thereby improving your cashflow. The assets finance solutions can include:
- up to 90% on outstanding invoices (invoice finance)
- up to 80% of the market value on plant and machinery (asset finance)
- up to 50% on stock
- up to 60% on property
Advantages to Businesses
- The asset finance costs can be spread over an agreed fixed term
- interest rates are generally lower than short term forms of finance
- Can be used in conjunction with other sources of finance
Disadvantages to Businesses
- Can take time to put in place
- Can be left with high back-end balloon payments
- If you update or upgrade the asset, a new agreement must be entered into.
Call us today to discuss which asset finance solutions are likely to be available to you. As specialist finance brokers we will be able to help find you the best deal.