Our guide to asset finance

For many businesses, acquiring equipment, vehicles, or new technology can be a significant financial challenge. Asset finance provides a practical solution, offering flexible funding options that allow businesses to access essential assets without draining cash reserves or compromising cash flow.

Whether an established business or a start-up, understanding how asset finance works and the options available can help to make informed decisions. Here’s our guide to asset finance tailored for all businesses.

What is asset finance?

Asset finance is a type of business funding that enables either the purchasing or leasing of assets such as machinery, vehicles, IT equipment, or other essential resources. Instead of paying the full cost upfront, asset finance allows payments to be spread out over a set period, easing financial pressure and preserving cash flow. In some cases, a business can even release the value of existing assets through refinancing. This can provide additional working capital for your business.

What are the types of asset finance?

• Hire Purchase (HP) – this allows the acquisition of an asset where payment is made monthly over a set period. It is ideal for companies who want to own the asset outright at the end of the agreement.
• Finance lease – an asset is rented over a set period for an agreed monthly fee. At the end of the term the asset can be returned, the agreement extended or a newer asset can be sourced. The flexibility and ability to update equipment regularly with low upfront costs is what makes this funding solution a popular choice to businesses.
• Operating lease – like finance lease only typically it will be for a shorter term. Payments are only made for the asset during the lease period and not for the full value of the asset. This is a perfect choice for a business looking for a short-term solution and do not want to take ownership of the asset.
• Asset refinancing – allows the release of the value of an asset owned by a business which can then be used as the collateral for securing a new loan. Ideal for a business that needs working capital without having to sell existing assets.

What are the benefits of asset finance?

• Preserve cash flow – no need to pay large upfront fees for assets helping to maintain a healthy cash flow.
• Access latest technology – through leasing, a business can ensure they always have state-of-the-art equipment.
• Tax efficiency – some asset finance solutions offer tax benefits such as reclaiming VAT and capital allowance claims.
• Flexible terms – asset finance agreements can be tailored to suit the needs of a business, whether the preference is short-term lease or long-term ownership.
• Business growth – with the right assets in place, a business can improve productivity, expand its operations and enhance service offering.

What are the most popular reasons for selecting asset finance?

• When new equipment is needed but a business wants to preserve its working capital.
• When a company needs access to essential assets without requiring a large upfront payment.
• When a business has seasonal revenue fluctuations and requires predictable payment schedules.
• When a company is looking to upgrade outdated equipment or technology.

How do you get started with asset finance?

• Identify the needs
• Choose the right type of asset finance
• Work with a trusted finance provider
• Review budget and repayment capacity
• Complete an application

What are the most common industries for asset finance?

• Construction – heavy machinery like excavators and cranes.
• Transport and Logistics – commercial vehicles, specialist refrigerated vehicles and fleet expansion.
• Manufacturing – production line equipment and tools.
• Retail – IT systems, point-of-sale equipment and shop fittings.
• Healthcare – medical devices and diagnostic equipment.
• Agriculture – farming machinery, stock and commercial building
• Wholesalers – racking systems, security systems and forklift trucks

Why choose NGI as your asset finance specialist?

Asset finance is a powerful tool for businesses looking to grow, upgrade equipment or effectively manage cash flow. It is essential to consider options carefully and speak with the experts. Our team are on hand to offer support for all asset finance needs. To provide more context we have recently helped several businesses. We have secured £35K for a Volvo tractor unit, £230K for a fleet of vans, £1million for a tea bag machine in Oxfordshire and £40K for and osmosis water treatment unit in Dorset.

To summarise, when used strategically, asset finance can empower a business to achieve its goals without overextending its resources. Why not partner with NGI? Please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.