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Accelerating Business Growth with Asset Finance


Four red semi trucks parked in a parking lot for asset finance.

As a business owner, it’s likely you have no shortage of competing demands on your capital. In your quest for growth, you might want to hire additional staff, move to bigger premises, increase production capacity, diversify your product range or spend more on marketing.


Asset finance

Asset finance is a financing solution that can help you grow your business without breaking the bank. With asset finance, you can acquire the assets you need without having to pay for them upfront. Instead, you make monthly payments over a set period of time. This can help you spread the cost of the assets over a manageable period and free up your cash flow for other important expenses.



Types of asset finance

There are two main types of asset finance: finance leases and operating leases.

  • Finance leases are also known as hire purchase agreements. With a finance lease, you essentially borrow money from a lender to buy an asset. The lender then owns the asset until you have paid off the loan. Once the loan is paid off, you own the asset outright.

  • Operating leases are different from finance leases in that you do not own the asset at the end of the lease term. Instead, you simply rent the asset for a set period of time. This type of lease is often used for vehicles and equipment that are subject to regular depreciation.

The benefits of asset finance

There are many benefits to using asset finance to grow your business. These include:

  • Improved cash flow: Asset finance can help you improve your cash flow by allowing you to spread the cost of assets over a manageable period. This can free up your cash flow for other important expenses, such as marketing or hiring new employees.

  • Reduced risk: Asset finance can help you reduce your risk by allowing you to avoid the high upfront costs associated with buying assets. This can be especially helpful for small businesses that do not have a lot of capital.

  • Tax benefits: In some cases, you may be able to claim tax deductions for the payments you make on an asset finance agreement. This can help you save money on your taxes.

How to choose the right asset finance solution

There are a few factors to consider when choosing the right asset finance solution for your business. These include:

  • The type of asset you need: The type of asset you need will determine the type of asset finance solution that is right for you. For example, if you need to buy a vehicle, a finance lease may be the best option. If you need to rent office space, an operating lease may be a better choice.

  • Your budget: Your budget will also play a role in determining the type of asset finance solution that is right for you. If you have a limited budget, an operating lease may be a better option than a finance lease.

  • Your tax situation: Your tax situation may also affect the type of asset finance solution that is right for you. If you are able to claim tax deductions for the payments you make on an asset finance agreement, this may make a finance lease a more attractive option.


Conclusion

Asset finance can be a valuable tool for growing your business. By understanding the different types of asset finance and the benefits they offer, you can choose the right solution for your business and improve your chances of success.


Additional information

  • Asset finance providers: There are many different asset finance providers available. You can find a list of providers in your area by searching online or contacting your local chamber of commerce.

  • Calculating the cost of asset finance: The cost of asset finance will vary depending on the type of asset you need, the length of the lease term, and your credit score. You can use an asset finance calculator to estimate the cost of asset finance for your specific needs.

  • Tax implications of asset finance: The tax implications of asset finance will vary depending on the type of asset finance you choose and your tax situation. You should consult with your accountant or tax adviser to determine the tax implications of asset finance for your business.




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DISCLAIMER: This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. This publication or any part of it may be reproduced only with the publisher’s prior permission. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication.

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