What Is Asset Finance?
- Chris Mountain
- Jul 3
- 2 min read
Updated: Jul 19
Asset Finance is the overarching term used to describe finance products that allow a business to acquire assets & equipment where the asset itself is used as the security for the lender. Across a decade working for one of the UK's leading asset finance providers, I supported hundreds of businesses across different sectors, from start-ups to large corporates.
I then made the decision to set up my own business, driven by my desire to provide my customers with flexible and tailored finance solutions as well as exceptional customer service. Having access to the whole of the market allows me to provide funding across a range of categories, including: asset finance, working capital, property, development, cash flow, bridging, & more.
What are the benefits of asset finance?
Cash flow management: allows businesses to acquire assets without a significant upfront cash outlay, retaining working capital for other operational requirements.
Flexible repayment options: tailored finance solutions with flexible repayment terms which allow businesses to align the repayment profile with their cashflows.
Preservation of credit lines: keeps traditional lines of credit, such as overdrafts, bank loans, & credit cards available for other business needs.
Keeps equipment up to date: allows businesses the flexibility to upgrade equipment or technology as needed, keeping them competitive & retaining a professional image.
What are the typical terms I can expect with an asset finance agreement?
How long can I take the funding over?Funding can be typically taken over a term between 1 & 7 years. However, in some instances & for certain assets with longer lifespans, funding over a longer period can be available.
How much deposit do I need?Traditionally, 10% + the VAT would be a typical deposit for an asset finance agreement. However, most lenders will now fund up to 100% of the net cost of an asset for the right customer / deal. Some lenders will also offer the ability to defer the VAT for up to 3 months to aid cashflow.
How flexible are the repayment options?Depending on the lender, the repayment profile of an asset finance agreement can be tailored to meet the exact requirements of the customer.
This could include seasonal payments to match the cashflows of a farming business, a balloon payment at the end of an agreement for a director's car to keep the monthly repayment amount down and a repayment break at the start of an agreement for a machine which may take some time to bed in fully & start earning the business income.
Photography: Headshot Toby
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