Asset Finance

Hire Purchase (HP)

HP allows your company to spread the cost of a major investment with monthly instalments over an agreed timescale with the asset being noted on your company balance sheet. At the end of the term you own the asset, however a small fee, called the Purchase Option Fee is often required to transfer ownership of the asset to you. As the finance company owns the asset until the last instalment is paid, you cannot sell the asset during the term. A residual balloon payment can be agreed at the outset to lower the monthly finance repayment.  

Operating Lease

Although similar to finance leasing, an operating lease is usually used for specialist plant or equipment that your business only wants for a limited period and never wants to own. The finance company will take all the risk of the future value of the asset. This enables you the full use of the asset throughout the agreement with the added benefit of a built-in residual value, thus reducing your monthly payments. The finance company that rents you the equipment is responsible for its maintenance. 

Finance Lease

Here the finance company buys a business asset on behalf of your company and then leases it to you. It differs from hire purchase in that ownership of the asset remains with the finance company. Instead  you make monthly payments for the ‘initial rental period’ until you cover the cost of the equipment, plus interest and at the end of the agreement you can choose to extend the rental period, sell the asset and keep a portion of the income from the sale or return the asset to the finance company and lease a newer version.

Asset Refinance

Asset refinance is a quick way to access the cash from assets on your existing balance sheet and use that value elsewhere within your business. The capital released not only provides a financial boost, but your company still benefits from the use of the asset. Once the principal, fees and interest have been repaid, the asset returns free and clear to you. The capital raised can be used to restructure or expand your business, buy new equipment, repay a loan or aid cashflow without interruptions to company operations.