Asset Finance Explained

Asset Finance helps businesses to launch, update and grow by helping them to purchase or lease equipment, machinery, or other essential business items through a regular payment plan. It can often be a critical part of a business’ expansion plans or simply used to replace old, worn-out, or outdated equipment. Asset Finance can even be used for new businesses looking to open their doors for the first time.

Asset Finance is often misunderstood, with people thinking it can only be used for common purchases like IT equipment or vehicles.

A good way to think of what Asset Finance can be used for is to imagine yourself standing in a completely empty space, and visualise an office being constructed around you. The groundworks, flooring, roofing, plastering, painting, desks, chairs, bins, laptops and monitors, microwaves, kettles, fridges, coffee machines, branded signage, phones, printers, printing paper, plants, clocks, wi-fi router, servers, notebooks, pens…they can all be purchased through Asset Finance.

Now imagine this for a shop, garage, broadcast studio or building site and you’ll quickly start to realise just how broad Asset Finance can be as a funding solution. You can buy or lease almost anything you can think of.In this article, we explain what Asset Finance is, who is eligible, what the advantages are, and how it works to help clear up any confusion around this versatile finance product.

A man reseraching asset finance for his business

What is Asset Finance? 

Asset Finance is a type of business finance that helps you to purchase or lease items for your business, such as computers, furniture, software, cars, etc. Generally, it will cover any type of machinery, fixture, fitting, or equipment that you can think of (in fact, it’s also often called equipment finance).

There are several products that cover Asset Finance including hire purchase, finance lease or operating lease. With asset finance, the asset itself is used as security for the finance.

Can I use Asset Finance to buy second-hand equipment

Asset finance doesn’t just apply to new assets. You can use the finance to help you purchase used or refurbished equipment, which can be a useful option if you’re looking to reduce costs or make your budget go a bit further.

What are some examples of what Asset Finance can be used for? 

Asset Finance can be used for a great many things, but some examples include:

  • Retail interior fitouts such as new flooring, shelving, and signage
  • Manufacturing plant machinery and equipment
  • Marketing IT equipment and software licences
  • Office furniture and fittings such as desks and chairs
  • Gym equipment for fitness centres such as weights and treadmills
  • Logistics vehicles such as lorries and vans 
  • Hotel amenities such as bedding, furniture and kitchen equipment
  • Agricultural machinery such as tractors and combine harvesters
  • Brewing equipment such as fermenting vessels, kettles and tanks
  • Printing  Large format printers, presses and machinery for publishers 
  • Construction equipment such as scaffolding, excavators and forklift trucks

Any associated costs can also be included. For example, if you were fitting out a shop, all costs for labour, decorating and building works would be included. Similarly, if you bought a new machine for a factory, any costs for installation and configuration can also be funded. Asset Finance is also not just for tangible assets. It can also be used for intangibles such as websites, patents, copyrights, logos and other branding collateral (essentially, anything that you can’t touch but still does have a cash value).

Who is eligible for Asset Finance?

You can be either a freelancer or a registered company and still be eligible to apply for Asset Finance. You’ll have to be based in the UK (England, Scotland, Wales & Northern Ireland).

It doesn’t necessarily matter how long you’ve been trading. Whether you’re a fresh startup or an established business, there are likely options available for Asset Finance. In fact, it’s often best to plan ahead before making purchases to make sure that you don’t miss out on any finance opportunities.

Why use Asset Finance? 

The advantage of Asset Finance is that it provides a useful amount of flexibility for businesses. Firstly, because it’s so versatile in terms of what it can fund (we’ve found funding for items as unusual as AstroTurf and car wash jets). 

Secondly, it allows you to purchase potentially expensive equipment without committing a large amount of capital upfront. Instead, you’ll be able to start using your assets straight away and manage your cashflow with payments that are spread out over time. These payments are manageable because they’re fixed, meaning they won’t suffer from inflation and interest rate rises. If you operate seasonally, we’re able to organise higher repayments during peak periods and lower payments during the troughs.

Finally, Asset Finance allows you to buy exactly what you want to buy or lease. You can choose your own supplier, and we’ll be able to mirror their payment terms, including stage payments and advanced payments.

What is the minimum amount I can borrow for Asset Finance? 

The minimum amount that we can finance is £10,000. This doesn’t have to be for just one expensive asset; it can finance the purchase of several assets as part of a larger project.

How Origin Finance can help 

Whatever you’re looking to fund, no matter the sector you work in, we’ve got you covered.

We’ve helped hundreds of businesses with their finance needs and will be able to put together a solution that’s bespoke to your needs.

Our Asset Finance team will work with you to understand your business, your growth plans and any challenges that you’re facing. We work with an extensive financial market, giving you access to commercial lenders who will only accept broker introduced applications. What’s more, we don’t charge any fees for our services as we are directly remunerated by the lenders.

Get in touch for a free, no-obligation quote to find out how we can help your business.

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