Can you get asset finance when you’re a small business?

Can you get asset finance when you’re a small business? You certainly can and it’s a great option as asset finance is far more flexible than other lending options. In this post we look at why asset finance solutions are an excellent choice for small businesses.

What is asset finance?

It is a type of lending that enables you to access business assets such as equipment, machinery, and vehicles without having to buy them upfront.

It can also allow you to release cash from the value in assets you already own or use your existing assets as security against a business loan. There are a number of different types of asset finance with each having its advantages and disadvantages, however all broadly follow these principles.

If you’d like to learn more about the terms around asset finance, we have an asset finance jargon buster here.

What are the advantages of asset finance for a small business?

There are many benefits, which include:

• Asset finance allows you to purchase the machinery or equipment needed to grow your business, without compromising on cash flow.

• Most agreements come with fixed interest rates so you’ll know how much you’ll be spending over the term, making it easier to plan budgets.

• Access to the latest equipment as it provides you with a way to purchase new machinery; something you may not have been able to afford if you had to pay upfront.

• It’s less risky than a business loan as you won’t get penalty charges if you can’t meet a payment, and will only lose the equipment.

What are the disadvantages of asset finance for a small business?

Although it is generally a very secure lending agreement, it’s worth knowing some of the risks.

• There is the risk of losing the asset, which may then affect the running of your business

• You’ll have to make some form of upfront payment such as a deposit

• When all of the finance costs are considered, the asset may cost more than purchasing outright

What can be financed through asset-based lending?

If a business needs an asset, it is usually possible to finance it. This includes “hard” assets such as plant machinery and “soft” assets such as office equipment. There are really no limits on what can be financed for a business.

Want to know more or obtain a quote? Get in touch by emailing or giving us a call on 01522 420 420. We are an asset finance and car finance brokerage based in Lincoln but work with clients nationwide.

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