If your business needs to purchase a piece of office or engineering equipment, a car, a van, or another asset and you don’t have the funds to buy it upfront, asset finance can help. Asset finance is a type of loan where you purchase a business asset, pay monthly payments to the finance company and at the end of the term of the deal you either own the asset or it is returned as part of a hire purchase agreement. Find out more about this popular form of business finance and whether it is right for your business.
Consider Whether Asset Finance Makes Sense
For many businesses, asset finance is a good option. Even if your company does have enough capital to buy a piece of equipment outright, you are taking this capital away from your working operations and may find it more difficult to finance day to day costs or growth. Asset finance from a provider like Ultimate Finance is flexible and depending on the deal you can plan your monthly payments and have the money available to develop your business. Asset finance makes sense when you have a good income and are generating profits, and you want to expand or focus on different parts of the market where a new piece of equipment would be useful.
Decide What Assets You Need
Once you have decided to look at asset finance, decide what you want the deal to finance. Look at the areas of your business where a new asset would make a difference. For example, you may want to be able to operate more efficiently and the latest technology would help you to do this. Or you want to grow your business and change the equipment you use so you can change what you produce or add a new product line. You may need new assets to keep up with your competitors. It is important that you are clear on the business case for each asset, as you may need to justify the purchase to a lender or to management. Plus, it helps when you can see a clear return on investment as it allows you to plan further into the future.
Decide Whether to Lease or Buy
Sometimes it makes more sense to lease an asset rather than buy it. Many items of technology quickly date and it makes sense to lease rather than buy and replace within a few years. Sometimes it is difficult to sell specialist equipment, particularly when it is a few years out of date. You may also only need the asset for a short amount of time and buying would be an unnecessary expense. Once these considerations have been made you can approach an asset finance lender for a quote.
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