What is Asset Financing?
From stock to vehicles to machinery, asset finance can help your business get what it needs to grow, without spending a lot of money up-front.
Asset finance can mean a range of things, including hiring something temporarily or spreading the cost of a new item you’ll eventually own outright. It can also help you make the most of existing assets – where you unlock the cash in something you already own and borrow against it.
Either way, asset finance allows you to get hold of important resources in a way that doesn’t put a strain on cash flow.
Prima Finance and Asset Financing
Asset Finance can help you swiftly acquire the equipment and vehicles you need to make your business grow in times of opportunity. From vans and buses to cameras and generators, we are experts in all aspects of Asset Finance for businesses including Operating Leases, Finance Leases, and Hire Purchase arrangements.
The most common forms of asset finance are hire purchase, equipment leasing and asset refinance. Here are a few examples to show you how each type works:
Hire purchase: Hire purchase is like a mortgage – you can spread the cost of an asset over a set period and once you’re all paid up, it’s 100% yours. Hire purchase agreements are usually at a fixed rate, which can help with planning future expenses and budgeting.
Equipment leasing: Leasing is more like renting. At the end of the agreed term, you could upgrade to a different model, continue leasing the same thing, switch to a new agreement, and pay what’s left until you own it, or simply return the asset.
Lease agreements also tend to be at a fixed interest rate, which again can be useful in terms of cash flow.
Asset refinances: Asset refinance is like remortgaging your house. Here, you can release cash in something you already own and use the money to consolidate debt or as security for a business loan. If you’re refinancing an existing asset to take out a business loan, different lenders will have their policies, but they will usually lend up to 80% of your asset’s value.
FAQ
An asset finance provider can deliver a funding decision in a matter of hours rather than days or weeks, like most banks.
Not necessarily, as yours could also be a replacement establishment with little or no trading history. However, you'll show that you just are in an exceedingly position to be ready to make repayments as agreed and on time. You’d be knowing evidence of some form of business plan for the lessor to require into consideration that has the new asset, showing how it'll positively impact your turnover.
Investing in assets that support business growth and expansion with a finance agreement can provide advantages that businesses would otherwise not have access to. Asset finance is a viable alternative to tying up valuable capital that could be better used elsewhere. It will also help spread the cost and improve cash flow.