What is Asset Finance?
Asset finance is one of the fastest growing alternative funding solutions for UK businesses. Asset finance involves using a company’s balance sheet assets, such as vehicles and equipment, as security to borrow money.
Asset finance can be a great solution to help businesses secure important funds for growth, purchasing equipment and take pressure off their cashflow.
How does Asset Finance work?
There are a variety of different models of asset finance available in the UK.
They are all slightly different, and that is why it’s important to seek advice from one of our trusted finance experts before deciding which type of asset finance is right for you.
What are the benefits of Asset Finance?
- Quick and simple process
- Fixed repayments and interest rates make it more manageable to budget
- Avoids using vital funds to make purchases allowing this to be used elsewhere
- They have lower interest rates to traditional methods of lending (such as bank loans and overdrafts) making them a good alternative for funding
Find Asset Finance for your business
Asset finance can be a valuable way for your business to secure important funds in a way that is affordable and flexible for your business.
Your business is unique and so are asset finance lenders. Each asset finance provider is different, so it is important to understand which one is right for your business. We have a panel of experienced asset finance experts who are qualified to offer you the asset finance advice you need.
It’s also important to understand that if repayments aren’t made, there is a risk of losing important assets that are critical to the running of your business.
Depending on the type of asset finance you choose, asset finance can be used for a vital cash injection, staff wages, paying suppliers, or purchasing assets.
Asset finance can be an ideal way for start-ups and growing businesses to easily increase working capital.
If you’re a start-up and don’t have an established trading history, you can use asset as collateral to secure funding.
This varies from lender to lender and is also influenced by the financial history of your business and the type of asset finance you choose.
There are lenders in the market that help businesses secure asset finance ranging from £1,000 to £10 million. Speak to one of our experienced lenders or brokers for financial advice.
This really depends on the credit score of your business, the value of the assets and the lender you choose. Just speak to one of our trusted finance partners who can help you find the right solution for your needs.
Usually, the length of any finance agreement can vary depending on your agreement, lender and circumstances of the loan. In general, the term tends to be between 1 to 7 years, but this may be shortened or lengthened dependent on your lender.
- Asset finance is a form of secured loan. If you default on your payments, the lender may seize the asset. This could harm your business if the equipment is important to your day-to-day operations.
- Asset finance is generally not effective when looking for a short-term loan
- Depending on the type of asset finance, you may need to make a deposit or pay the first month upfront
- You may be responsible for maintaining the asset in question whilst under your care and setting up a suitable insurance policy - depending on the type of asset finance you choose
As a business owner, it can sometimes be difficult to find support and guidance you can trust.
THEDIRECTORSCHOICE.COM brings a panel of trusted business finance experts together in one place and helps you find the perfect match for your business needs.
Get in touch with our experienced lenders and brokers to find out if they are the right fit for your business, and if asset finance is right for you.