What is it?
Asset finance is an alternative funding solution to support the acquisition of new or additional assets. Outright purchases can be a significant drain on working capital and not always the most efficient way to manage capital expenditure.
There are a range of asset finance options open to customers and these can be summarised as follows:
- Hire Purchase – the payment of a fixed amount across a specific period to cover the cost of the asset.
- Operating Lease – Allows you to lease your asset from a provider over an agreed period. Typically, there is a built in residual value for the asset, which reduces the monthly payments, thereby bringing further cash flow benefits to the customer.
- Finance Lease – Allows you to lease the asset from a provider over an agreed period. Repayments are spread over the economic life of the asset and can typically be tailored to customer requirements.
- Contract Hire – covers vehicle fleet management, repair, maintenance and productivity.
What are the benefits?
- Can often expedite access to modern technology and the resulting financial benefits that can bring.
- Improved cashflow for the customer
- Can often be a tax efficient depending on the tax allowances available
Where can I find out more?
Further details can be provided by your local corporate bank or through the Finance & Leasing Association:
Telephone: 020 7836 6511
Download the factsheet in PDF format - here.