Asset finance allows businesses to release the value tied up in assets such as plant and machinery or to purchase new assets.

What is asset finance?

Asset finance essentially means the financing of an asset. Whilst many assets are available “on finance”, the terms of these tend not to be as favourable as sourcing your own asset finance. By making regular payments over time, it avoids a large dip in your cash-flow, or alternatively, waiting to save the cash for the purchase.

How does asset finance work?

We’ll approach our panel of asset financiers, who will assess the purchase and set out terms for you to repay. They make the payment for the asset, and hold a charge over it, which remains until their debt is paid off. The payment terms are over a period of time, and avoid you having to part with the payment upfront (although a deposit can be required). The terms usually rely on the strength of your business and the asset itself (those with a higher resale value tend to be less risky in the eyes of asset financiers).

What are the benefits to asset finance?

  • They fund the initial payment – you stagger your payments over a set period
  • If you’ve got a handle on your cashflow, it can often be tweaked up or down, dependent on your business (great for seasonal businesses!)
  • Stimulates growth – you can move into new markets rather than having to save the money for the asset