What is asset finance?

Asset finance is a type of business funding that allows a company to obtain equipment, vehicles, or other assets without the need for an upfront payment. The assets are typically used as collateral for the finance agreement.

What are the types of asset finance?

The main types of asset finance are hire purchase, leasing, and asset refinance. Hire purchase allows the business to acquire an asset by paying in instalments, while leasing involves renting an asset for a fixed period. Asset refinance allows the business to release equity from an existing asset to fund other business needs.

How does asset finance work?

Asset finance works by providing the business with the use of an asset while spreading the cost of acquisition over a fixed period. The finance provider typically owns the asset until the final payment is made, at which point ownership transfers to the business.

Who can use asset finance?

Asset finance is suitable for any business that needs to acquire equipment or other assets but may not have the funds available for an upfront payment. It can be particularly helpful for small and medium-sized enterprises (SMEs) that need to invest in equipment to grow their business.

How much funding can be obtained through asset finance?

The amount of funding available through asset finance depends on the value of the asset being financed. Typically, businesses can obtain funding up to the full cost of the asset, although some providers may require a deposit.

How long does it take to receive funding through asset finance?

Funding through asset finance can typically be obtained within a few days of the finance agreement being signed, although this can vary depending on the provider and the complexity of the financing arrangement.

Is asset finance expensive?

Asset finance can be more expensive than other forms of business financing, such as traditional bank loans. However, the cost can be offset by the benefits of acquiring the asset without an upfront payment and spreading the cost over a fixed period.

What are the benefits of asset finance?

The main benefits of asset finance are that it allows businesses to acquire equipment and other assets without an upfront payment, spreads the cost over a fixed period, and provides access to assets that may otherwise be unaffordable.

What are the risks associated with asset finance?

The main risk associated with asset finance is that the business may not be able to keep up with the payments and may lose the asset as a result. It is important to carefully consider the affordability of the finance agreement before entering into the arrangement.

Can asset finance be used in conjunction with other forms of financing?

Yes, asset finance can be used alongside other forms of financing, such as bank loans or overdrafts. However, it is important to ensure that the financing arrangements are structured appropriately to avoid any conflicts or complications.