
Asset Finance
Finance used to purchase/refinance business equipment; Vehicles, Stock or “Soft Assets” (example: I.T. Equipment/software)
- Hire Purchase – Own the “asset” outright at the end of the Term
- Contract Hire – Rent the Equipment for an agreed period of time
- Operating Lease & Finance Lease – flexible finance option, low upfront costs without owning the Asset outright
How It Works
For clients who want to own the “asset” at the end of the Term.
- Lender purchase the “Asset” and agrees a payment plan to fit their budget
- Client pays VAT upfront and makes own arrangement for maintenance, repairs and servicing.
- Client can purchase the “asset” at the end of the Term
- TAX Advantages –
- Reclaim VAT – if registered
- Could claim Capital Allowances
- Off-set payment interest against their “Profits”
- Client chooses how Finance is structured; flexible deposit; fixed payments with option for a balloon payment at end of the agreement.
For the client who wants to rent equipment at a fixed monthly fee with service included.
- Easy Budgeting for maintaining the equipment
- Frees up Capital. VAT spread across each payment so up-front costs are lower.
- Tax efficient – 100% of rentals paid normally off-set against taxable profits.
- Simple and Straightforward
- Off-balance sheet funding– Equipment doesn’t depreciate on the clients balance sheet
- Higher productivity – Equipment could pay for itself through rentals matching income.
When the Client wants to use an asset without buying it outright.
- Lender buys the Asset and client “leases” it for a monthly fee.
- VAT calculated on the monthly fee, not at outset.
- At end of the Primary Period, customer can either hand the Asset back, sell to a third Party on Lenders behalf or continue to rent it after the Primary period.
- Tax Advantages
- Frees up Capital – VAT paid with each rental. Keeping costs down
- Tax Efficient – Asset payments counted as business Expenses.
- Cost control – Easy budgeting for maintaining equipment. With option to include maintenance costs in the repayment plan.
Allows the client to use the Asset for a set Term without the potential risk of owning it outright.
- No deposit or VAT
- Customer benefits from a lower monthly fixed cost because the rental is based on the Asset’s residual value.
- At end of Primary period customer can continue to lease based on fair market value, subject to the Lenders Agreement.
- TAX Advantage – As for Finance Lease EXCEPT – Equipment doesn’t depreciate on the customers Balance Sheet.
All types of Asset for all types of Industry
- Agriculture
Boats
Broadcast Television & Sound
Cars; Vans; Taxi’s
Catering
- Coin operated
Construction and Mining
Food Processing
Garage Equipment
IT
Machine Tools
Materials Handling
Medical & Veterinary Equipment
Printing & Paper Processing
Renewables
Security
Telecoms
Textile
Transportation
Waste