Asset financing of equipment is ever increasing and one area that’s in high demand.
Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said,
“The strong growth in asset finance new business in the first quarter of 2017 was above expectations, and reflects the improved outlook for business investment reported by the Bank of England in its May 2017 Inflation Report.”
Preserving money for operational costs, purchasing stock, identifying new products and business opportunities that may arise are key drivers of growth and make the benefits of asset finance clear.
Asset finance (also known as equipment finance) may assist you in obtaining a wide range of equipment requirements, such as IT hardware/software, lighting, catering, and helps you to spread the cost.
What types of asset finance are available?
Making the right decision on which finance product you choose to use for asset purchase is incredibly important. There are three types of asset finance:
The finance company essentially buys the asset and rents it to you for an agreed period. You are responsible for maintaining and insuring the asset during the life of the agreement
The finance company owns the asset until the final payment is made – then you have the option to purchase the asset outright for an additional sum
Where you only require a short payment period. You can simply borrow the money, with terms from 3 to 12 months
Here’s a simple guide providing some clarity around each product’s features:
We always recommend that businesses seek to discuss their expenditure plans with an accountant or other relevant adviser.
Key things to remember:
- Where VAT is classified as reclaimable assumes your business is VAT registered
- The tax and VAT treatment may differ dependent upon the asset finance products
- Facilities can be made on demand in accordance with the terms and conditions of the agreement
- Please seek specialist advice on VAT and tax relating to your business
- Please note that security may be required and product fees may apply
LDF bring money into your business, not bureaucracy. We’ve eliminated red tape from our business, and we can pass the benefits on to you. For over thirty years, we’ve helped thousands of small businesses with multi-purpose loans finance.