Lease finance or hire purchase
To purchase business equipment, vehicles or machinery without paying up front Asset finance allows the cost the asset to spread, or rather than purchasing the asset can be rented for the short or longer term.
Most types of business asset, be they vehicles, plant, machinery, equipment or something else, can be funded through some form of asset financing product.
The main advantage of asset finance is to spread the cost of acquisition of the equipment over a period (commonly between 3 and 5 years). There are other additional benefits;
- Depreciation: Because the asset does not sit on the business balance sheet, risks around depreciation of the asset (especially where an asset would be written off quickly, such as IT equipment) are removed from the business and held by the lender.
- Tax benefits: For many businesses removing the capital cost of the asset and renting it (which as a business expense is tax deductible) is preferential in reducing future tax bills (check with your accountant for more information)
- Cash flow: Not having to find the full purchase price of an asset allows the cash-flow of the business to be more predictable and smooth. Especially when the purchase of equipment or a vehicle was not anticipated.
Most assets with good usable life can be refinanced, contact us for a quotation