Purchasing new assets for your business is an essential part of growth, however SMEs are often held back from quicker expansion by their cash flow.
Outlaying large, upfront payments for new equipment, tools and machinery can detrimentally affect the day to day running of your business, but failing to invest can see your customer base begin to suffer.
Asset Finance has been created to help businesses overcome this common pitfall. Lenders are able to either purchase the asset on your behalf and allow you to spread the cost in affordable monthly repayments, or simply lease the equipment to you for as long as it's needed.
Capitalise has partnered with lenders who specialise in providing asset finance to a vast array of industries, ensuring that you can access the assets you need as well as dealing with sector-specific professionals who understand your needs.
Read on to learn more about the different types of asset finance available to UK businesses.
Finance lease
A finance lease works in a similar way to renting any equipment you might need. You'll typically lease the asset for its economic life meaning that you'll never be left with outdated equipment. This gives you the flexibility of full, unrestricted access to the tools you need without the burden of ownership.
Contract hire
Contract hire is most commonly used for accessing new vehicles for your business. Payments are calculated based on the purchase value and estimated residual value of the vehicle at the end of the agreement. It's usually sold once the contract expires which helps to drive down the monthly repayments for the duration.
Hire purchase
Prefer to own the asset at the end of your agreement? A hire purchase works in a similar way to a finance lease however your monthly payments will
be working towards full ownership of the asset at the end of the term rather than simply leasing it for its economic life.
Operating lease
An operating lease is great for businesses who rely on plant, machinery and tools to carry out their services or produce a product. Payments are made until the expiry date of the agreement is reached, at which point you'll pay the difference between the original purchase price and residual value upon expiration.
Refinancing
It's never been easier to raise capital through your existing assets by refinancing a loan against your current equipment. This can help you to quickly and easily secure additional finance from your assets if you'd rather invest funds elsewhere in your business.
