Hard Asset Finance
Hard assets are items that tend to hold their value more compared to soft assets. Hard assets can be items such as cars, commercial vehicles, machinery, equipment, manufacturing items.
These types of assets are usually more expensive so purchasing them outright can potentially affect your cash flow massively. Alternatively, you may not have the capital to purchase the assets which is understandable, this is where we will be able to step in and help you.
Asset finance is a type of lending that enables you to acquire the assets your business needs to grow and operate to its full potential by spreading the cost of your purchase.
What type of assets can be financed?
- Commercial vehicles – HGV’s trailers, lorries, small and large vans
- Machinery – packaging, laser engraving, compressors and more
- Construction equipment – cranes, diggers, cement mixers, hot steel rolling machines and more
- A fleet of Company and Directors’ vehicles
- Agricultural plant and machinery – tractors, livestock trailers, mowers, harvesters and more.
- Renewable Energy – Solar Panels, Wind Turbines, Ground Source Heat Pumps, Biomass Boilers and more.
Soft Asset Finance
Soft assets are essential to any business whether that be: furniture and fittings, security equipment, IT hardware and software. However, the cost of these items can sometimes add up quickly, especially if you’re a fairly new business or a business that might be moving into their first office premises. So instead of purchasing everything you need outright at once, asset finance is an option. Choosing to go down the asset finance route will allow you to spread the cost, often with only a small payment upfront.
Why use soft asset finance?
- It’s sustainable – A regular payment plan that can minimise big hits on working capital and cash flow
- It’s flexible – Asset finance doesn’t only just cover soft assets, it can be used for different areas of your business such as vehicles, equipment and machinery
- Tailored to suit you – Repayment amount and length of term can be tailored to your business’ needs and wants
What types of assets can be financed?
- Furniture for HMOs, Serviced Accommodation, Furnished Rental Properties
- IT Equipment such as Laptops, Desktop Computers, CRM, Softwares
- Broadcast and Media
- Security Equipment
- Retail and Leisure Equipment
Asset refinancing is a way of utilising existing assets and making them work harder for you. A refinance can help provide a helpful injection of working capital into your business at a time when it needs it most. Businesses of all sizes can benefit from the introduction of working capital for a variety of reasons such as expansion, new contracts, or starting new projects.
Asset refinancing is usually only available on assets, such as equipment, plant, machinery and vehicles that the business owns in full – not those that are currently subject to any existing or outstanding financing arrangements.
As with conventional asset finance, once a business asset is refinanced, the finance company takes ownership of the asset and the business makes agreed monthly payments over the contracted period until the sum, plus any interest is repaid.
The benefits of an asset refinance:
- Provides access to working capital that otherwise would have been tied up
- The finance that you have received from asset refinance can be reinvested into further asset growth
- Repayments are monthly affordable payments
- Protects your company from asset depreciation
Leasing & Hire Purchase
What is Lease Finance?
Lease finance enables you to obtain a wide range of equipment necessary to operate and expand your business efficiently and effectively without having to outlay the initial cost of purchasing it. The lending is wholly or largely secured on the assets being financed. Lease finance also gives you some flexibility to replace or upgrade equipment at any time.
An operating lease is a type of equipment lease where the customer (or ‘lessee’) rents an asset for a period of the item’s useful life. An operating lease might also be known as business contract hire, particularly if it relates to commercial vehicles.
Operating leases are the simplest form of equipment leasing, where the customer doesn’t own the asset and therefore doesn’t take on the risks and rewards of ownership (such as maintenance costs). An operating lease is essentially a method of renting an asset for your business over a short or medium period.
One of the main benefits of an operating lease is that instead of appearing as an asset on the balance sheet, the monthly rental payments can be offset against profit generating a healthy tax saving.
A finance lease is a type of equipment lease where the customer (or ‘lessee’) rents an asset for the majority of the item’s useful life. Finance leases are sometimes also known as capital leases. One key feature of finance leases is that the customer takes on most of the risks and rewards of ownership (i.e. maintenance costs and fluctuations in value), but never actually owns the asset. What this means in practice is that a finance lease looks and feels a lot like hire purchase, but they’re different on the balance sheet.
What is Hire Purchase Finance?
Hire Purchase agreements differs from other lease agreements as you have the option to purchase the asset outright at the end of your term. A term is the agreed timescale that you will pay for the asset through monthly affordable instalments.
Paying for your assets in monthly instalments means that you can spread the cost across a period of time, making it easier to budget and helping retain capital in your business for further growth. This payment method is suitable but not limited to purchasing vehicles (company cars and vans), machinery, construction and commercial equipment.
Hire Purchase Benefits:
- More time to repay – Spread the costs over an agreed period of time
- Tax efficient – You can offset hire purchase interest and charges against pre-tax profits
- You will own the Asset at the end of the agreement (if you wish you can then sell the asset)
The lender retains ownership of the asset until the finance is completed. Whilst you are still making payments, you are not allowed to sell or dispose of the asset without the lender’s permission. The lender will be able to repossess the asset if your business falls behind with payments.