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Asset Finance
Asset Finance encompasses Hire Purchase and Leasing in their various forms, and enables you to spread the cost of a business asset over a number of years.
It can be used to fund a wide variety of business assets, from motor vehicles to computers to plant & machinery. Finance is available for new purchase or refinance.
There has been a growing trend in recent years for business owners to raise capital against their existing assets through a “sale and leaseback” arrangement with a funder, and this can be an excellent way of releasing extra cash into your business.
The main forms of asset finance are as follows;
- Hire Purchase / Lease Purchase.
A relatively straightforward arrangement leading to outright ownership of the asset at the end of the term. You pay a deposit then spread your repayments over a number of years (typically 3 to 5 years). A final balloon payment can be incorporated to reduce the monthly repayments. - Finance Lease.
Used where ultimate ownership is not required. The leasing company retains ownership of the asset, and you rent it for as long as you require it. This form of finance minimises the initial deposit. - Operating Lease.
Similar to a finance lease, but the funder builds in a residual value to reduce the monthly payments. This can be attractive as the funding is usually treated as being “off balance sheet”. - Contract Hire.
This is a fixed cost total motoring package, that can include vehicle rental, tax, maintenance, servicing, and recovery. - Contract Purchase.
Similar to contract hire, but enables the business to ultimately acquire the vehicle.
Whatever your requirements, whether you are looking to buy a new piece of equipment, or raise capital against your existing assets, Select Business Finance can help you identify the most suitable form of asset finance for your needs.