This option suits those aiming for ownership of the equipment or machinery at the end of the finance term. After completing all repayments, the asset becomes yours. Initially, while the asset appears positively on your balance sheet, the finance provider retains ownership until fully paid. Maintenance responsibilities lie with you, and the asset cannot be sold until either the term concludes or you settle the contract early, as per the agreement’s terms.
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Compare asset finance
Purchase assets for your business and spread the cost over time
From office and IT equipment to factory machinery or vehicles, asset finance allows you to pay for it in instalments
Asset finance deals
5 results found, sorted by affiliated products. How we order our comparisons. Commission earned affects the table's sort order.
Start Ups and Established Businesses Welcome!
Nationwide Finance Business Loan
Loan amount
£6,000 to £10,000,000
Loan term
12 months to 72 months
Nationwide Finance is a Direct Funder. They help over 50,000 businesses each year get finance. Same day decision and funds in 24 hours. Rated Excellent 5* on Trustpilot and Google. No.1 direct funder for new starts and established businesses.
Instant offers and quotes available across a range of products
Funding Options by Tide Business Loans
Loan amount
£10,000 to £2,000,000
Loan term
12 months to 84 months
Access 120+ lenders, offering the broadest range of finance products available via a single application in minutes. Rated Excellent on Trustpilot. A team of Business Finance Specialists is on hand to help. Funding Options, part of Tide, is a credit broker, not a lender.
Borrow up to £500,000
Love Finance Business Loan
Loan amount
£5,000 to £500,000
Loan term
3 months to 60 months
Love Finance is an online broker and lender specialising in a wide range of business finance, with a simple application process and same day funding options. Available to UK businesses trading over 3 months.
Instant Quote & Dedicated Account Manager
Rise Funding Business Loan
Loan amount
£10,000 to £5,000,000
Loan term
1 month to 72 months
Rated ‘Excellent’ on Trustpilot. Appling via Rise Funding does not affect your credit score. Tailored service & options based on your needs and circumstances. Minimum turnover £200,000 with 1 year trading.
Minimum turnover £200,000 - 12 months registered trading
Nest Business Loan
Loan amount
£10,000 to £5,000,000
Loan term
1 month to 120 months
Nest's free service matches you with over 200 lenders so you can easily compare the options to find the best rates currently available.
Minimum turnover is £200,000 with 1 year trading. Their service is rated 5 stars 'Excellent' on Trustpilot and 5 stars on Google.
What is asset finance?
Asset financing refers to a form of business financing where businesses purchase, or hire, assets such as equipment, vehicles, or machinery through instalments. Unlike traditional loans, asset finance is secured against the asset itself, and allows business to purchase necessary equipment without investing large amounts of capital up front.
How does asset finance work?
Asset finance is a strategic financial solution allowing businesses to acquire essential assets through manageable steps, ensuring they maintain operational efficiency without heavy upfront investments.
Here's how it works:
1. Identify the need: It starts with recognising your business's requirement for an essential asset, like machinery, vehicles, or IT equipment.
2. Choosing the right asset: Research and select the asset that best meets your operational needs and offers good value, considering its lifespan, maintenance, and resale value.
3. Finding a finance provider: Shop around for banks, specialised financial institutions, or companies offering asset financing. Compare terms, interest rates, and repayment options.
4. Undergoing credit assessment: The finance provider will assess your business’s creditworthiness, financial health, and repayment capacity, influencing the finance terms.
5. Finalise the finance agreement: If approved, you'll enter into an agreement detailing the finance duration, repayment schedule, interest rates, and any associated fees.
6. Acquiring the asset: The finance provider funds the purchase, and your business gains access to the asset.
7. Making regular payments: Repay the finance amount plus interest as per the agreed schedule through regular instalments
Depending on the agreement type, you might own the asset, return it, or have options to purchase or renew.
Asset finance helps to preserve working capital, allowing businesses to allocate their money more efficiently across other areas that may require immediate funding."
Is asset financing right for my business?
Determining whether asset financing is the right choice for your business involves a careful examination of your financial situation, business model, and long-term objectives.
Here are some factors to consider:
Business cash flow: Asset financing can be particularly beneficial if your business experiences fluctuations in cash flow. It allows you to acquire necessary assets without a significant upfront investment, thereby maintaining liquidity for other operational needs or unforeseen expenses.
Type of assets required: The nature of the assets you need plays a crucial role. If your business depends on high-value, long-lasting equipment (like manufacturing machinery, vehicles, or high-tech computers), asset financing can be a smart way to spread the cost over the asset's useful life. This approach avoids the obsolescence risks associated with rapidly evolving technology or machinery.
Growth and expansion plans: If your business is in a growth phase, conserving cash while still acquiring assets can be a strategic move. Asset financing can support expansion plans without the need for spending a lot of capital, allowing you to allocate resources to other growth initiatives like market expansion, research and development, or increasing headcount.
Credit considerations: Asset financing may be more accessible than traditional loans, especially for businesses with limited credit history or those that have faced financial challenges. Since the finance is secured against the asset, lenders may be more willing to consider applications that might not meet the criteria for unsecured lending.
By carefully considering these factors, you can make a more informed decision about whether asset financing aligns with your business needs and financial strategy.
Types of asset finance
Hire purchase
This option suits those aiming for ownership of the equipment or machinery at the end of the finance term. After completing all repayments, the asset becomes yours. Initially, while the asset appears positively on your balance sheet, the finance provider retains ownership until fully paid. Maintenance responsibilities lie with you, and the asset cannot be sold until either the term concludes or you settle the contract early, as per the agreement’s terms.
Business contract purchase
In this variation of hire purchase, monthly payments are minimised, covering only the loan's interest. A substantial final (‘balloon’) payment is then made to clear the loan. While this reduces monthly outgoings, the total cost incurred over time is higher.
Finance lease
Here, the finance provider purchases the asset and leases it to you. Your monthly payments cover the asset's cost plus interest. Responsibilities for insurance and upkeep of the asset fall on you. At the lease's conclusion, you can choose to continue renting the asset, return it, or sell it on behalf of the finance provider.
Operating lease
Ideal for short-term asset needs, an operating lease allows you to rent equipment for a fixed period. This arrangement often includes options to upgrade to newer models during the lease term. Contrasting with a finance lease, the finance provider assumes responsibility for maintaining the asset throughout the term.
Contract hire
Particularly beneficial for businesses requiring vehicle fleets, contract hire simplifies the process. The provider handles sourcing and maintenance of the vehicles, while your business makes regular payments over the agreed lease duration. This option significantly reduces the administrative burden associated with fleet management.
Types of asset finance
Hire purchase
Business contract purchase
In this variation of hire purchase, monthly payments are minimised, covering only the loan's interest. A substantial final (‘balloon’) payment is then made to clear the loan. While this reduces monthly outgoings, the total cost incurred over time is higher.
Finance lease
Here, the finance provider purchases the asset and leases it to you. Your monthly payments cover the asset's cost plus interest. Responsibilities for insurance and upkeep of the asset fall on you. At the lease's conclusion, you can choose to continue renting the asset, return it, or sell it on behalf of the finance provider.
Operating lease
Ideal for short-term asset needs, an operating lease allows you to rent equipment for a fixed period. This arrangement often includes options to upgrade to newer models during the lease term. Contrasting with a finance lease, the finance provider assumes responsibility for maintaining the asset throughout the term.
Contract hire
Particularly beneficial for businesses requiring vehicle fleets, contract hire simplifies the process. The provider handles sourcing and maintenance of the vehicles, while your business makes regular payments over the agreed lease duration. This option significantly reduces the administrative burden associated with fleet management.
Pros and cons
Pros
Spreads out the cost of expensive purchases
Keep your business technologically up-to-date
Potential to offset payments against taxable profits
Tailored solutions to fit your business model
Cons
Long-term costs might be higher due to interest
Possibility of the asset becoming outdated
Commitment to regular payments, regardless of business performance
Can often be more expensive over time than buying an asset outright
Alternatives to asset finance
If asset finance doesn't suit your business, here are some other options for financing:
Bank loans
General-purpose loans that might offer lower interest rates but require upfront payment.
Overdrafts
Suitable for short-term needs, albeit with higher interest rates.
Equity financing
Involves selling company shares but no repayment obligations.
Government grants and schemes
Offer non-repayable funds but often come with specific conditions.
FAQs
What can be financed through asset finance?
Practically any tangible business asset, including vehicles, machinery, and IT equipment.
Is asset finance available to all business sizes?
Yes, from startups to established corporations.
How does asset finance impact my balance sheet?
It depends on the type of finance; hire purchases typically show as an asset and a corresponding liability, while leases might not be capitalised.
Can I get asset finance with a poor credit history?
It's challenging but possible, though expect higher interest rates.
What happens if I can’t keep up with payments?
The asset may be repossessed, and your credit rating could be affected.
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