What type of asset finance is right for you?

Finding the right type of asset finance for you

Trying to find what type of asset finance is right for you can sometimes be tricky, as all the information you are no doubt given can be hard to navigate. Here at WestWon we provide finance for a range of sectors and assets. We offer finance for sectors such as furniture and fit out, dentistry and most types of vehicle finance. We also offer finance for assets such as, IT hardware and software, and audio visual equipment to name just a few. And not to mention our range of business loans.

What are the different types of asset finance?

Hire Purchase

A hire purchase is where an asset is purchased and then paid for in instalments. This means you are able to receive the asset faster than normal. You are also able to spread the cost over a certain amount of time, usually between 1 and 5 years. Only when all the payments have been paid in full will you have complete ownership of the asset. However, depending on the agreement, you are usually responsible for the maintenance of the asset. This is one of the most common agreements we do here at WestWon, especially within vehicle leasing and finance.

Equipment leasing and financing

This mainly involves a lender leasing the equipment to you. You will again pay them in monthly instalments for the arranged time that you use the equipment. This ensures that you don’t pay a large sum upfront, and so no big amount of money is taken out of the business all at once. So, this will inevitably take some pressure off of your cash flow.

However, different to a hire purchase agreement, you most likely won’t have ownership of the equipment at the end of the lease term. But different lenders have different terms, so depending on what you would both like to do, you could reach a different outcome. For example, agreeing to own the equipment at the end.

Finance lease

A finance lease can also be known as a capital lease. It’s usually where the finance company makes the purchase of an asset. They then lease this back to the customer, including interest, in order to make a profit. Again, depending on the finance company, the terms and conditions will differ. You will still get full use of the asset for however long your lease term is. However, you won’t own it at the end of the term.

Operating lease

An operating lease is similar to a finance lease, but the customer will not have ownership rights over the equipment. It’s also usually shorter than a finance lease.

Benefits to asset finance and leasing

Cash flow – You will be able to keep funds in your business to be used elsewhere.
Alternative funding lines – No need to use up an existing bank facility.
The latest equipment – Always have the latest computers in your business by implementing a recycling strategy, whereby you replace equipment at the end of the lease term
VAT – On rental agreements VAT is paid in the rental, not in full and upfront.
Pay for the equipment as you use it – Companies pay employees over time as they work, so why pay all the cost for computers in advance?
Tax planning – Using a lease rental agreement, 100% of your rental is deductible against your companies Corporation Tax.

Contact Us

If you would like more information on what type of asset finance is right for you, or any other finance needs you may have, then please don’t hesitate to contact us. You can email us on hello@westwon.co.uk, or alternatively you can call us on 01494 611 456. You can also see more over on our LinkedIn page.