Asset Finance - asset based finance
You Want A Funding Solution To Help Purchase New Equipment Or Refinance Existing Assets.
Asset Finance - What Is It?
Our Asset Finance service can assist your business with hire purchase, finance lease or minimum term agreement facilities for both new and existing equipment.
Asset Finance facilitates the acquisition of capital equipment without the financial burden of outright purchase. You pay for the asset with the income it generates or the costs saved and hence this helps to maximise your working capital.
Purchasing New Equipment
1. Hire Purchase
You select the supplier and the equipment you want. We agree with you a repayment plan for the equipment - usually between 2 and 5 years (and for certain long life assets, up to 7 years, upon request). The supplier delivers the equipment to you and we pay the supplier. At the end of the repayment period, upon receipt of an option to purchase fee, the equipment is yours.
Hire Purchase helps by spreading the cost of expensive items over an extended time period with the added advantage that the taxation of hire purchased goods differs from outright capital purchases. You keep the capital allowances. The VAT is paid in advance in full based on the capital cost of the goods, but the rentals are VAT-free thereafter.
2. Finance Lease
Similar to Hire Purchase except that at the end of the repayment period you do not own the equipment. However, you can either:
- Return the equipment to us.
- Continue to use the equipment in exchange for a small annual secondary rental payment.
- Sell the equipment on our behalf at a price we agree (we will repay most of the sale proceeds to you).
The cash flow advantage to you is that the VAT is paid on each rental payment throughout the life of the contract.
3. Minimum Term Rental Agreement
Similar to Finance Lease, the main difference being that once the minimum hire period has expired, you can return the goods to us giving us advance notice of this at no extra cost to yourself.
Refinancing Equipment
If you already have cash tied up in machinery, and need to release that cash to invest elsewhere in your business, our Asset Finance service can help. We can buy your existing equipment from you and provide you with a Hire Purchase or Finance Lease facility which you can repay over an agreed period.
What Sort Of Assets Can I Refinance?
Durable assets with a proven resale potential and which are uniquely identifiable perhaps by a serial number.
Benefits of Asset Finance
There are numerous benefits to using asset finance:
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Immediate Use Of Equipment Without Capital Expenditure
The equipment can be obtained and paid for from cash flow rather than you having to wait for a capital budget. Asset finance can provide your business with another line of credit leaving your existing borrowing facilities undisturbed.
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Fixed Rate Finance
Unlike some credit facilities, such as bank loans and overdrafts, the repayments remain fixed throughout the term of your lease.
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Flexibility
The term of the agreement can be designed to suit your specific requirements.
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Maximum Finance
Asset finance provides finance for the entire cost of the equipment with, generally, minimal initial cash outlay.
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Certainty Of Credit
A lease, minimum term rental or hire purchase agreement is a facility that cannot be withdrawn or curtailed by credit squeezes or changes in economic conditions. Except in the event of default by the lessee, the facility will not be withdrawn.
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Budgeting Advantages
Asset finance assists budgeting, the regular nature of the rentals and the fixed amounts are helpful in cash flow forecasting.
What Next?
If you would like to speak with one of our Asset Finance specialists simply complete our contact form. Alternatively you can call us FREE on 0800 91 95 92, email us at marketing@bibbyfinancialservices.com or request a call back.
