Asset Finance and Equipment Leasing
Asset finance is typically used to give you access to equipment, machinery and vehicles and can be done using different types of finance agreements such as equipment leasing, hire purchase, finance leases, operating leases, or asset refinance.
Asset finance allows you to avoid the risky cash flow position of paying large sums of money up front for brand new equipment.
Hire purchase allows you to pay for the asset, in instalments, over time. The item appears on your balance sheet, and you are responsible for maintenance and insurance — but you’ll also have full ownership of the item after the term ends.
The lender buys the asset you need, and rents it to you on a lease. That means you have it straight away, and only need a fraction of the total amount up front, with the associated VAT spread across the agreement term also. At the end of the agreement you can buy the equipment for a residual amount, continue hiring it, upgrade it or return it.
A finance lease is generally a hire agreement over a period similar to that of the asset’s life.
You get full use of the asset and pay the full value over time, but don’t technically own it, however it does appear on your balance sheet as the risks and rewards of ownership sit with you.
Operating leases are a rental agreement with a set term which is usually shorter than the term of the asset’s life. Unlike a finance lease, an operating lease won’t appear on your balance sheet, however operating leases can be cheaper as the asset will normally have a residual value at the end of the agreement term.
Want to know more? Get in touch today and let us guide you through your options. We know all the right lenders and we treat every application on a personal basis so that your search is tailored to your requirements. That way, you can be assured we’ll find you the best rate and the best financial product for your needs.