Asset
Finance Quotes
Asset
Finance is a type of finance facility offered by finance providers
to business customers looking to acquire equipment for their
business and pay for it over an agreed period rather than purchasing
the equipment outright. Asset finance is typically underwritten
as a lease rental, which is very popular amongst businesses
due to the fact that it offers 100% tax relief on each of the
rentals paid. Depending on what bracket corporation tax your
business falls into, this in real terms can equate to a worthwhile
overall percentage relief on the actual lease rentals themselves
- check with your accountant for specific benefits.
Typical
equipment businesses require asset finance for include catering
equipment, telecoms equipment, IT equipment, vehicle tracking
equipment, medical equipment and laptops to name just a few
examples of equipment generally financed, and various funders
will have a preference list on the type of equipment they are
happy to consider financing. Asset Finance allows a business
to budget a monthly or quarterly cost for their equipment, being
a fixed cost product the monthly lease rentals typically do
not change and are fixed payments throughout the duration of
the lease itself. Asset Finance is generally offered to businesses
on a Lease Rental basis, therefore the business doesn't own
the equipment as it is purely renting the equipment from the
finance house (and getting the associated tax benefits of renting
equipment) who has paid the original equipment supplier and
bought the title to the equipment.
With most asset finance agreements, it is the responsibility
of the equipment supplier to offer warranty and back-up for
the product, leaving the finance house to act purely as the
financier of the equipment itself. Asset finance also allows
a business to keep other lines of finance free, such as commercial
loans, overdrafts, etc from the bank to use at a later date
if required. Asset finance agreements are typically underwritten
on the strength of a company's balance sheet. The underwriters
normally look for three to four times cover based on the net
worth or shareholders funds of the busines requiring funding,
other factors the underwriters consider will be the length of
time the business has been trading, previous and current credit
history, and the general performance of the business itself.
