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How to Find the Best Asset Finance Provider for Your Business

Asset finance providers are the companies who lend money to businesses for their equipment, machinery, vehicles and technology. They work with a range of lenders to offer a variety of different types of business finance – hire purchase, refinance/capital release, finance lease and operating lease are just some of the options available.

They can be useful for SMEs as they often have a more flexible credit scoring and approval process than traditional lending, and are willing to look at the wider business picture when assessing your application. As a result, they can offer quick access to funds and allow you to get started straight away with your new assets.

The advantage of using asset finance to buy the hard and soft assets your business needs is that you can scale up immediately without having to wait until you’ve saved enough cash. This allows you to make more sales, take on new customers and grow faster. Similarly, you can also save on VAT as payments are typically less than the cost of buying outright.

How can I find the best asset finance provider?

There are a wide range of asset finance provider in the UK, some of which specialise in specific industries. These providers can help you to choose the right type of finance for your business, and some even have a dedicated team to manage the process for you. There are many factors to consider, including the amount of funding you need, the rate of interest you’re looking for and how long you need to borrow for.

When choosing an asset finance provider, it’s important to find a company that is registered with the Financial Conduct Authority (FCA), which oversees the credit and consumer finance industry. There are also trade associations for the industry, such as the Finance and Leasing Association, which has statements of recommended practice that you can refer to.

The most common types of asset finance are hire purchase and contract hire. With hire purchase, the finance provider purchases the asset on your behalf and then rents it back to you for an agreed period of time. At the end of the rental period, you can choose to continue renting the asset, purchase it for a pre-agreed price or return it.

Another option is finance lease, which is similar to a hire purchase but the finance provider owns the asset and then rents it to you for an agreed term. The final (or balloon) payment at the end of the lease period is used to pay off the original loan value. This is suitable for companies who need to make a lot of use out of their asset, such as those that operate a fleet of vehicles.

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