Asset Finance
Asset and equipment finance is a form of funding that allows businesses to acquire or lease essential machinery and equipment without paying the full cost upfront. This approach is beneficial for managing cash flow and spreading the cost of expensive assets over time.
Common types of asset and equipment finance include: |
Chattel Mortgages
Secure a loan using the purchased equipment as collateral.
Leases
Rent the equipment for a set period, with the option to purchase at the end.
Hire Purchase Agreements
Rent the equipment for a set period, with the option to purchase at the end.
What should you think about before considering Asset Finance? |
Interest Rates and Fees
Understand the total cost over the life of the finance agreement.
Loan Terms
Consider the term length and how it aligns with your business plan.
Total Cost of Ownership
Include maintenance, insurance, and other associated costs.
Agreement Flexibility
Look for options that offer flexibility, such as early repayment without penalties.
When seeking this form of finance it is important to match the revenue generated by the equipment with the repayments for the equipment. For example, if the equipment is to fund a 5 year project, finance for the equipment should be for no longer than a 5 year period.
