So, by using asset finance, companies can retain their cashflow, which would free up capital to invest elsewhere in their business, like workforce or training.
Therefore, in the current financial economic climate, asset finance is a perfect product for companies looking to invest in capital items.
Asset finance can be arranged for most types of business assets. As a guide, if an asset is durable, identifiable and moveable, then it is fundable.
It is suitable for a wide range of organisations from SME’s to large quoted companies.
Usually a deposit is required, varying from 1 rental or payment in advance up to 20% (depending on market value), but the average is 3 payments in advance.
Asset finance deals take into account the economic life of the asset - for example, three years for IT hardware and software, and seven years for printing equipment (dependant on age).
Repayment terms are agreed at the outset and can be fixed or floating. Repayment period can be monthly, quarterly or annual.
The rates charged for asset finance depend on the credit strength of the individual company and asset concerned.
There are mainly two main types of asset finance products available - Hire Purchase and Finance Lease.
Hire Purchase enables companies to take ownership of the asset at the end of the agreement. They also claim any capital allowances available. Full VAT paid up front with deposit.
With Finance Lease, the leasing company owns the asset & charges a rental payment. At the end of the term, the lease is either extended or the asset is sold with the company retaining most of the sale proceeds. Cashflow friendly because you pay the VAT on monthly payments.
Finally, in summary, there are overwhelming reasons why you should use asset finance over cash, bank loan or overdraft:
To find out how we can help you, call us on 029 2070 7994 or email us on email@example.com. We’ll help you every step of the way.
We look forward to being of service.
Joefizz Asset Finance Ltd
For more information on how we act on behalf of our clients, our payment structures and terms please read our Retail Client Agreement (here).