Getting access to cutting-edge equipment and technology with a degree of flexibility asset financing can give you, means this is often seen as the perfect solution for small to medium-sized businesses.
Asset financing is a way of building your company whilst spreading costs over a period of time, often used as an alternative to self-funding, crowdfunding or bank loans. Even when money is tight, asset financing means you can still invest in your business.
There are two principal forms of financing available: leasing and hire purchasing.
- Financial and Operating Leases
Under a financial lease, equipment can be leased by your business for the duration of the asset’s lifetime. During this time, your business will have effective ownership of the asset but be responsible for its upkeep. At the end of the period, however, your business will not own the asset and you may you owe extra money if the asset is not in a fit state for resale.
Unlike financial leases, operating leases allow you to lease an asset for a set period of time. Also unlike a financial lease you are not usually responsible for the maintenance of the asset, but you will still get full use of the asset during the period of the lease.
Leasing is an excellent approach to take if your company only needs equipment or technology for a short period of time, whilst it also enables you to replace your equipment when you wish.
- Hire Purchasing
Hire purchasing is also an excellent source of gaining immediate access to the latest assets under a negotiable deal that can be structured to suit your business. Unlike leasing, however, once that period the deal ends, your business has full ownership of the asset. As you end up as the owner of the asset, you are then free to sell the equipment once the term of the deal is over. With hire purchasing the depreciation of the asset can be written off against taxable profits, whilst the finance charges for the assets you hire are tax deductible.
If you don’t have the upfront funds to do so, or want to release cash from the equipment you already own, asset financing is a way of accessing assets quickly and with a flexible deal that suits you.
Get in touch with us to discuss the options available to you. Email: gpurvis@robson-laidler.co.uk or tel: 0191 281 8191