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Buy machinery, vehicles or equipment

We’ll help you find the right asset finance

Think agent

Compare asset finance to spread the cost of a new purchase or release cash from commercial assets you already own.

£
Test icon

Buy machinery, vehicles or equipment

We’ll help you find the right asset finance

Compare asset finance to spread the cost of a new purchase or release cash from commercial assets you already own.

£
Bionic

What is asset finance?

Asset finance is a type of loan that allows business owners to finance new assets such as equipment, machinery, and vehicles. It also enables businesses to release finance from the value in assets they already own. Typically, a lender will offer around 90% of the asset value which is worked out by the effecting depreciation. 

If a business defaults on its payments, an asset-based lender can seize the asset and sell it to pay off the remaining debt. 

What types of asset finance are available?

We can compare several types of asset finance to find a solution that fits the needs of your business. Options include: 

  • Equipment leasing - This works like an extended rental agreement. The lender will buy the equipment and then lease it to you for a fee. You can then use the equipment as needed and will be responsible for its maintenance and upkeep, but you never actually own the item. This type of leasing arrangement usually comes with a fixed interest rate and term, so you make the same repayments each month.  
  • Hire purchase - This type of business finance is often used to buy equipment or vehicles. The lender will buy the asset and you’ll pay for it in agreed installments over a set period. You may also have to pay a deposit at the beginning of the agreement or a balloon payment at the end. You’re responsible for the maintenance of the asset but you won’t own it until the final repayment has been made. 
  • Finance leases - A finance lease works like an extended rental agreement. The lender buys the asset and then leases it to you for a fixed monthly fee. You are responsible for the maintenance of the asset and will take ownership of it at the end of the lease term. 
  • Operating Leases - This is a leasing arrangement whereby you rent an asset for an agreed length of time, but not for the entire shelf-life of the item. Also known as business contract hire, usually if it relates to the lease of a commercial vehicle. Other assets that can be hired include property, plant machinery, and heavy equipment. 
  • Asset refinance - Asset refinancing is a way of releasing the value of any assets your business owns, while allowing you to keep using them. Basically, you sell the asset to a finance company who gives you a lump sum. You can then use this money for other business purposes while also keeping use of the asset. You repay the lump sum given to you by the lender over an agreed period. Once all the repayments have been made, you take back ownership of the asset. 

What are the benefits of asset-based finance?

  • Because the lending is asset-based, it means your business can invest in assets multiple times if required. 
  • Due to asset-based loans having fewer qualification criteria, it can often make this form of finance quicker and easier to access. 
  • Asset-based lending can be used as a gateway to getting other forms of credit. This is often easier for new businesses that are building up their creditworthiness. 

What are the limitations of asset-based finance?

  • As the loan is secured against your business assets, these items can be seized in the event of a default. 
  • If the assets you want to use as collateral are given a low valuation, this can substantially cut the amount of money you can borrow. But if your asset increases in value, your loan limit will not necessarily increase. 
  • Costs can be high when your asset is industry-specific or there is a limited appeal from the lender. 

An example of how a business might use asset finance

A one-stop-shop that operated as an off license, convenience store and a greengrocer has opened a new store and needs to fund the renovation. It also needs to upgrade the refrigeration equipment and introduce new assets such as coffee machines.  

Their first thought was to apply for a term loan to cover the cost. But after speaking with the team at Think Business Loans, it was decided that the best decision was asset finance. This allowed them to release more funds by investing in assets multiple times over, and the qualification criteria meant less time waiting for their money. 

When the finance was approved, the client was able to renovate one of their stores to a high standard which improved revenue and overall customer experience. They were able to do this without having an impact on their cash flow. 

How to find the right type of asset finance for your business

There are several things to consider before applying for asset finance, including: 

  • How much you want to borrow - It’s important to know how much the item you need to buy costs, so you know how much you need to borrow. This is especially important if it is being custom made for your business. 
  • How much you need to borrow - The amount you need to borrow will help determine the best type of asset finance for your circumstances, as well as the repayment terms. If you choose a longer-term loan, this usually means lower monthly repayments but more to pay back overall. 
  • What assets you want to buy/refinance - The type of item you want to buy or put up for refinance might influence the asset finance company you could use, especially if it involved specialist equipment. 

If you’re unsure about anything, the team at Think Business Loans are on hand to answer any questions and help you find finance that fits your business. 

If you feel that asset-based finance is the best option for your business, do not hesitate to give our team a call to get this process moving on 0203 880 9880. 

Asset finance

What is asset finance?
What types of asset finance are available?
What are the benefits of asset-based finance?
What are the limitations of asset-based finance?
An example of how a business might use asset finance
How to find the right type of asset finance for your business

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You tell us about your business

Every business is unique, so we first need some basic info on your business so we can find finance to fit your needs and circumstances. Our cutting-edge iFunds technology will match your business against the suitable loans and lenders.

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We compare loans and lenders

We put your application to tender with our panel of lenders to find the most suitable solution. An account manager will then talk you through your options and you can track the progress of your application via our smartphone app.

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Once you’ve chosen the loan you want, we’ll handle all correspondence and information requests. Your account manager will be on hand to answer questions, give you regular updates and make sure you get your funds as soon as possible.

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