Understanding Asset Finance

Asset finance is a loan that is used to obtain equipment.

Whenever organisations invest in tangible assets, this could be anything from office equipment to manufacturing plants, from cars to combine harvesters, they usually need an affordable, secure means of finance.

In fact, Asset Finance is the third most common source of finance for businesses, after bank overdrafts and loans, and it is also of growing importance in the public sector.

Asset finance is a flexible alternative to a traditional bank loan, providing significant cash flow and tax benefits for businesses looking to purchase a new piece of equipment, a vehicle or other fixed assets.

Asset finance accounts for the majority of debt-financed business investment.

Around one in three small businesses that have any external borrowing use asset finance. Amongst these, the use of asset finance is particularly high in the North East (46%) with agricultural and manufacturing making the most of leased equipment.

Although most banks offer a range of assets finance products, there are dozens of specialist lenders providing bespoke solutions. Several of these lenders are very competitive in specific sectors such as trucks and also renewables.

Asset Finance can also be used to release much needed cash. It is a simple, speedy solution without the need for complex legal intervention.

The options and choices are endless so always seek advice from a commercial finance expert, they could provide you with the asset solution you’ve been looking for.