What is Asset Finance?
Asset Finance is a funding solution commonly used by business owners to affordably acquire new equipment, technology, furniture and software. It’s a finance option that can be used to source all kinds of assets that a business may need to run its day-to-day operations. Whether businesses are looking to source brand new or second-hand equipment, Asset Finance providers can help to support all kinds of investment.
If an SME is keen to upscale without sacrificing a large amount capital at once, an asset finance solution can work wonders.
That’s because it allows them to spread the cost of investing over a longer period of time, without having to pay out a lump sum in order to invest in their new piece of equipment.
That means you can secure the latest technology and leading equipment without worrying about the impact on your cashflow. There are a couple of ways you can do this to best support your business, Finance Lease and Hire Purchase.
Finance Lease
When choosing a Finance Lease, instead of paying the money for an asset upfront, SME owners will agree to rent the asset for a fixed or minimum term and make payments over an agreed period of time. Throughout the course of the lease agreement, you are responsible for paying monthly rental payments.
At the end of the lease period, the asset is returned and a new lease can be taken out. There is no option to purchase the asset at the end of the lease period.
Hire Purchase
Hire Purchase refers to the agreement to acquire an asset from the lender over a specified period of time. You can then own the item at the end of the contract.
Similar to a Finance Lease agreement, Hire Purchase agreements allow businesses to acquire vital equipment and machinery as well as save on up-front costs that could limit cash flow or working capital.
Hire purchase contracts usually involve an initial lump sum at the start of the term, fixed payments over the course of the agreement and a final payment at the end of the term to secure the final purchase.
What assets can I finance for my business?
Both Finance Lease and Hire Purchase agreements can help SMEs acquire a range of different business equipment, including both hard and soft assets.
While not exhaustive, here are just a few of the assets businesses have been able to acquire through the use of an asset finance solution with Time Finance.
Soft Assets
- Office Furniture
- Commercial Kitchens
- Software
- Shop Fit-Outs
- Audio Visual & IT Hardware
Hard Assets
- Construction
- Printing Equipment
- Manufacturing & Engineering Machinery
- Tractor Units, Trailers & LCV's
- Agricultural & Forestry Equipment
- Cars & Vans
Which businesses can benefit from this solution?
At Time Finance, we support all kinds of SMEs from a number of sectors and backgrounds.
However, we are proud to work with a wide range of industries, including:
- Construction
- Manufacturing
- Engineering
- Agriculture
- Transportation and haulage
- Hospitality
- Leisure
Asset financing can support SMEs in a number of areas as they pursue growth, such as:
- Helping them find and use vital equipment needed to give their business access into new markets or take on fresh projects.
- Aid with the day-to-day operations that come with running an SME.
- Updating existing technology in-house.
- Easier access to new technology and equipment.
- Improving the quality of the production of products and services.
- Scaling operations.
- And much more.
What are the overall business advantages of asset finance?
Affordability
As well as maintaining cash flow, it can make equipment financing more affordable overall, thanks to spreadable costs set over a predetermined period.
Budget Friendly
This makes it easy to budget while enjoying the use of your brand-new asset, whether you choose to keep it or not.
Flexible options
With flexible repayment options, asset finance can also support businesses looking to refinance existing assets to support cash flow.
Tax benefits
Businesses can not only gain a competitive edge by accessing the latest equipment and technological innovations, but also access potential tax benefits.
It’s important to note that tax reliefs may not be available to every business. The availability and value of any tax reliefs depend on the individual circumstances of you and your business.