what is asset finance?

What is asset finance?

Firstly, what is an asset?

An asset is an object or useful resource that holds value to a person. Assets can be owned by an individual, business, or government. An asset helps deliver a purpose to the user. Examples of  assets can be anything from cash to furniture.

What is asset finance?

Asset finance is the acquirement of equipment for a business with finance as the payment method. That meaning businesses can spread the cost of an asset over a period of time as opposed to paying upfront. This can provide businesses with a considerable amount of relief. Not only to their cash flow but also to their tax liability. This will be explained further in detail later in this blog.

The benefits of asset finance

Asset finance is a useful tool to businesses. As you can imagine, paying in full and upfront can be very damaging to a businesses’ cash flow. Whereas, asset finance allows companies to keep cash in the business to be spent on other projects.

Not only this, but businesses are able to deduct 100% of their rental’s tax liability against their corporation tax bill. Additionally, VAT liability on the asset will be distributed monthly along with the total amount payable.

It also provides businesses with an alternative line of credit. So, there is no need to use up a credit source that they already have.

Another reason as to why business choose the asset finance route is so that they can keep up to date with the latest equipment on the market. This is especially popular for those that seek access to the most recent technologies. Technology is ever evolving, so you are only losing money when you purchase a depreciating asset. But, by financing technology equipment allows companies to regularly upgrade their equipment. And consequently, with access to the most recent technologies, it allows businesses to remain competitive within their sector.

Contact Us

For any further questions on asset finance and how it might benefit your business, please don’t hesitate to give us a call on 01494 611 456. Alternatively, send an email to hello@westwon.co.uk and a member of our friendly team will get back to you.

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