Realising the needs of your business and financial requirements is key to asset finance
If your business requires special machinery then decisions will have to made regarding how to finance such expensive outgoings. One of the main options which makes such large purchases easier to manage is asset finance. Knowing exactly what you want to achieve from the transaction is the key to getting the best out of any asset finance deal.
There are multiple options which will suit a variety of circumstances, so identifying the ideal choice for your business is obviously the first step to take.
Long Term Leases and Eventual Ownership
If your business is seeking to use asset finance to enter a long-term agreement, then a Finance Lease will be ideal as this enables you to rent the asset over a long period of time.
Finance Leases are popular because they come with certain tax and cashflow benefits, such as requiring the VAT to be paid on the rental payments rather than the purchase price.
If such a deal sounds appealing, but you would like to explore the possibility of eventually owning the asset, then you can agree to a Hire/Lease Purchase instead which will enable you to keep the asset at the end of the agreed term. This is an excellent purchasing option as it breaks the cost down into much more manageable chunks and spreads them out over time. The flexible repayment options also mean you can structure the payments around your company’s cash flow.
A similar option is the Contract Purchase, which is similar to the Hire/Lease Purchase but includes the option to choose not to own the asset at the end of the agreement (potentially ideal for assets that massively depreciate in value).
Finally, the Sale and Leaseback option provides your business with the ability to access cash that would otherwise be tied up in the purchase of an asset.
If you would like to learn more about asset finance, contact Prolease Finance and our friendly personal team can help you decide which option is better for your business.