Asset Finance

We're Asset Finance specialists

We arrange asset finance assisting with major capital expenditure, the re-finance of existing assets, invoice discounting and specialist loans.

Our Asset Finance service

We're finance professionals with expertise in a wide range of industries.

  • Plant and equipment with everything from server racks, warehouse automation to cranes.
  • Factory machinery including robotics to production line machinery.
  • Commercial vehicles large & small from a single van to a fleet HGVs.
  • Executive company car fleets with market-leading rates.
  • Available to companies in England, Scotland, Wales and Northern Ireland.

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Asset Finance is a type of finance used to purchase larger assets, such as plant and machinery or vehicles.

It is an alternative to a loan, and allows businesses to access the funds needed to acquire assets without having to use up their own funds. Asset finance works by allowing the business to pay for the asset in instalments over a period of time, rather than all upfront.

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A comprehensive guide to Asset Finance


Characteristics and features of Asset Finance

  • A form of finance secured against assets. 
  • Allows businesses to purchase long-term assets without liquidating their own funds. 
  • Allows businesses to spread the cost of assets, making them more affordable. 
  • Interest-only repayments can be made. 
  • Assets can be upgraded or replaced when needed. 
  • Grants and tax reliefs may be available. 

How does Asset Finance work?

Asset finance works by allowing a business to purchase the asset it needs without having to access funds from its own finances.

This can be done in one of two ways – either through a lease or a loan. With a loan, the business borrows the funds and repays them over time with interest. With a lease, the asset finance company owns the asset and the business pays regular instalments for its use.


Different types of Asset Finance

Asset finance is a type of borrowing used primarily by companies to obtain the equipment and assets they need to operate. The basic idea is that the lender takes security over the asset(s) being financed, which means the asset(s) can become the property of the borrower once the loan is repaid in full.

There are four key different types of asset based funding, each suited to different needs and circumstances and fall under the term asset finance, these are:

  1. Hire Purchase
  2. Refinance / Capital Release
  3. Finance Lease
  4. Operating Lease

Hire Purchase (HP)

This is one of the most common types of asset finance. With Hire Purchase, the lender buys the asset on behalf of the borrower, who then makes monthly repayments over a set period until the full cost of the asset (plus interest) is repaid. Once the final payment has been made, the borrower takes full ownership of the asset.

Refinance / Capital Release

Refinance or Capital Release involves borrowing against an asset that the business already owns, such as plant and machinery or vehicles. This type of finance can free up cash flow by allowing businesses to release equity in assets that may have been fully paid for.

Finance Lease

In a finance lease, the lender buys the asset and leases it to the borrower for an agreed period of time. The borrower pays rental payments (plus interest) for the duration of the lease, but does not own the asset at the end of the term.

Operating Lease

An operating lease is similar to a finance lease, but is typically used for shorter-term leasing of assets. The business pays rental payments for the use of the asset, but does not take ownership of it at any point. At the end of the lease term, the asset is returned to the lender.


Who can use Asset Finance?

Asset finance is available to businesses of all sizes, ranging from small businesses to large corporations. It is used by businesses for the purchase of tangible assets, such as plant and machinery, buildings, vehicles, technology, etc.


When can Asset Finance be used?

Asset finance can be used by businesses when they wish to acquire an asset in order to grow or expand their operations.

It is commonly used when businesses have limited cash reserves, or when they need to purchase an expensive asset. It can also be used when businesses are unable to raise funds through traditional loans.


Benefits of Asset Finance

  • Allows businesses to acquire assets without using their own cash. 
  • Helps maintain cash flow. 
  • Gives businesses access to tax reliefs. 
  • Helps businesses acquire assets more quickly. 
  • Affords businesses the flexibility to upgrade or replace assets when needed. 
  • Offers risk protection against fluctuations in asset prices. 
  • Offers affordable payment terms. 
  • Helps protect lines of credit and cash reserves. 

Conclusion

When deciding on which type of asset finance to use, businesses should consider factors such as their cash flow needs, how long they need the asset for, and whether ownership of the asset is important.

It’s important to seek advice from a financial advisor or lender to determine which type of asset finance is right for your business.


We're experienced financial experts who arrange Asset Finance, securing you the best deal from the UK's top lenders.

Get expert assistance today, we're on hand to answer any questions about Asset Finance.

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Call our friendly team on 01202 612934we're ready to help.

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