Asset Finance
All businesses need regular capital investment to replace or update valuable equipment. Flexible asset finance can help your business by:
- Enabling you to conserve your capital while giving you immediate access to the equipment
- Helping you to manage your budget more effectively with fixed, monthly payments
- Allowing you to use your capital to finance additional working capital
There are several options available:
Hire Purchase/Lease Purchase
This enables you to spread the cost of your investments. You will gain title at the end of the agreement, either automatically or on payment of an ‘option to purchase’ fee. The agreement is usually arranged over a fixed period and with fixed repayments secured on the products which are being financed. For tax purposes, you will be considered the owner of the equipment from the beginning of the agreement and can therefore claim capital allowances straight away.
Finance Lease
This is similar to hire purchase in that the full cost of the equipment is recovered over the lease period, but you do not gain title. However, you will still be responsible for maintaining the asset and can deduct the full cost of lease rentals from taxable income, as a trading expense. When the lease period ends, you can agree to a secondary lease period with significantly reduced payments. Alternatively, the asset may be sold to a third party.
Re-financing
This allows you to use equity in wholly or partly unencumbered assets to release cash into your business — for example, as an immediate capital injection to fund expansion. Alternatively, assets subject to agreements with other finance companies, can be refinanced leading to a reduction in monthly commitments by extending the period.
The benefits of re-financing include:
- Assisting cash flow by injecting capital into the business
- Reducing monthly payments
- Continuing use of the asset which is being refinanced
- Using the capital raised to purchase other business assets not normally considered suitable for standard hire purchase or leasing agreements.
If would like us to contact you to discuss Asset Finance please call us on 0800 121 7757 or email info@ultimateassetfinance.co.uk