Asset finance is a product within the finance industry often used by businesses to obtain the equipment and facilities that they need to grow and expand. The general process is that it usually involved paying a regular charge for use of the given asset over an agreed amount of time, hence the cost of buying outright is avoided. The most commonly sought options for asset finance are leasing and hire purchase.
Why Use Asset Finance?
Asset finance can be used to fund any asset – ranging from machinery to photocopiers, forklift trucks and vehicles. This could be the perfect solution if your business needs new equipment that might otherwise be affordable.
The various forms of asset finance provide a volume of advantages to businesses, such as; they give businesses access to the equipment they need without incurring a negative cash flow from an outright purchase, Payments are usually fixed so leasing and hire purchase are excellent budgeting tools. This allows an improved cash flow management. Finally, asset finance providers often specialise in an asset of which they have a vast wealth of knowledge and expertise.
Asset Based Lending
Asset based lending combines invoice finance with extra capital released against a property, stock, plant and machinery or commercial vehicles. This is a blended funding solution, and often ideal for larger businesses.
Asset Finance – Leasing & Hire Purchase
We offer a flexible range of funding solutions which include leasing, hire purchase, refinancing and general asset finance. With asset finance packages, hire purchase and leasing – you can breakdown the payment of your assets into monthly bite-sized chunks. This makes the investment much more affordable and has less of an impact on your cash-flow.
Advantages of leasing:
When leasing – you are paying for the use of the asset, but do not own the asset at any point.
At the end of your contract, you can renew the lease contract, or you may be offered the ownership of the asset via purchase.
If your assets become outdated, and your contract comes to an end, then you simply take out a new lease with the latest machinery that is available. This allows a significant impact on the quality of your product and brand.
There is a full-service package which can include repairs and replacements, saving your business money and time when things go wrong. The leaser will have a responsibility for the asset’s upkeep.
Hire Purchase – The Advantages:
No security or collateral is required to secure an asset finance deal within hire purchase.
There is no requirement for taking out a loan, overdraft or favour from a family member to find the total funds needed to pay up front for an asset – this enables you to pay for the asset in affordable monthly repayments.
At the end of the contract, when the asset is paid off, you will be the owner of the given asset. This allows you to sell the asset later for a lump sum, although the price would most like depreciate throughout the entire hire purchase facility. Bottom line, you will receive a return for your investment on the asset, unlike leasing the process of leasing.
Why use Beacon?
As a leading commercial finance brokerage we are fully up to date on our lenders various offerings. We can quickly establish suitable lenders and ensure you are working with the right company. We regularly receive feedback from all lenders in the market and pride ourselves on finding you the best long term deal.
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