ASSET FINANCE

When you need to invest in your business, a simple solution is to use the asset as security for the funds required to acquire it. The market is flooded with asset finance options and products, but these can generally be broken down into four areas.

HIRE & LEASE PURCHASE

 

Using the asset as security, this repayment facility offers full ownership of the asset at the end of the agreement. Repayments can be a fixed monthly, quarterly or annual sum. The repayments can also be structured to suit your businesses seasonality or cashflow cycle, customising to suit you. As desired, a final lump sum, often referred to as a balloon, can be applied to reduce the monthly repayment.

CASH FLOW

Your company cashflow benefits by paying in instalments, rather than in one lump sum.

UPFRONT COSTS

In most cases a deposit contribution will be required. This is generally a percentage of the net cost, usually between 5% and 10%. This can be as a part-exchange, cash or by agreement deferred until the first payment.

TAX

Your business can claim writing down allowances and can offset interest payments against taxable profits. Where applicable, the full VAT will be paid at the start of the agreement or deferred in line with your VAT reclaim date to help ease cashflow.

INTEREST

The interest rate can be fixed or variable. We will talk to you in more detail about these options, to ensure you make an informed decision, that best suits you.

CURRENCY

If you have a regular, sustainable and proven foreign currency income, we can explore the option of securing the facility in the currency you desire to repay in.

FINANCE LEASE

When ownership is not key, leasing works well for a number of assets, as well as vehicles. At the end of the lease you can continue renting the equipment by paying annual secondary repayments/rentals or sell the goods to a third party and retain up to 99% of the sale proceeds.

CASH FLOW

Your company cashflow benefits by paying rentals, rather than one lump sum payment.

UPFRONT COSTS

You won’t be asked to pay a deposit, instead you pay rentals in advance, from as little as one monthly rental. VAT will also be spread over the term of the agreement.

FLEXIBLE

Rentals can be structured according to your anticipated cashflow.

TAX

All or part of the rentals can be offset against taxable profits.

VAT QUALIFYING VEHICLES

Typically 50% of the VAT can be reclaimed on rentals and on the sale proceeds of the car. Where the car is a ‘pool’ car, or you have finance leased a commercial vehicle, 100% of the VAT can be reclaimed on both the rentals and sale proceeds.

OPERATING LEASE

Operating Leasing or ‘Op Leases’ are rental agreements which can be used to finance business assets, including heavy commercial vehicles, coaches, vans, cars, machinery and other assets as approved. The Funder will build a residual value in to the lease facility which will reduce the rentals, helping cash flow and where possible, making the debt ‘off-balance sheet’ (subject to your auditors’ approval).

CASH FLOW

Your company cashflow benefits by paying rentals, rather than one lump sum payment. In addition, the Funder or supplier of the Goods will apply a residual value and take the end of term asset risk. This will reduce the monthly rental, easing cashflow. This in turn could be used to match the value or terms of your customer contracts or lower cash outflow to beat your competitors pricing.

UPFRONT COSTS

You won’t be asked to pay a deposit, instead you pay rentals in advance, from as little as 1 monthly rental but typically 3. VAT will also be spread over the term of the agreement.

FIXED MAINTENANCE CONTRACTS

Fixed maintenance contracts can be built in to the monthly rental

TAX

All or part of the rentals can be offset against taxable profits. The Asset can normally treated as ‘off-balance sheet’ (subject to your auditors’ approval).

END OF LEASE OPTIONS

At the end of the primary term, you can return the asset, extend the period or seek to act as agent in the sale of the equipment.

CONTRACT HIRE

Contract Hire provides the option to fund a single vehicle or fleets of vehicles for business customers. The contract hire rental will include the vehicles road fund licence. The vehicle can also be hired on a fully maintained basis so you can simply insure, fuel and go.

CASH FLOW

Your cashflow benefits by paying rentals, rather than one lump sum payment. With one fixed monthly rental, you can spread the cost of vehicle ownership over the useful life of the vehicle. Fleet management is also available for growing fleets.

UPFRONT COSTS

You won’t be asked to pay a deposit, instead you pay rentals in advance, from as little as 1 monthly rental but typically 3. VAT will also be spread over the term of the agreement.

BUYING POWER

You can benefit from the purchasing power of the Contract Hire company with vehicle prices significantly discounted along with associated maintenance costs.

TAX

All or part of the rentals can be offset against taxable profits.

VAT

Typically 50% of the VAT can be reclaimed on rentals for a car and 100% on the maintenance costs. If you contract hire a commercial vehicle, 100% of the VAT can be reclaimed on both the rentals and the maintenance.

END OF LEASE OPTIONS

At the end of the primary term, you can return the vehicle and be assured that the BVRLA ‘fair wear and tear’ policy is applied. Equally, you may explore the option of extending the hire or purchasing the vehicle (subject to approval).

FUTURE VALUE RISK

Disposal of the vehicle’s, at the end of the contract, sits with the contract hire company.

LET'S TALK

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hello@custombusinessfinance.co.uk

0114 442 8008

 

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Custom Business Finance Ltd is an independent commercial finance broker not a lender, as such we can introduce you to a wide range of finance providers depending on your requirements and circumstances. We are not independent financial advisors and so are unable to provide you with independent financial advice. Custom Business Finance Ltd may receive payment(s) or other benefit from the finance provider if you decide to enter into an agreement with them. Custom Business Finance Ltd is an appointed representative of AFS Compliance Ltd which is authorised and regulated by the Financial Conduct Authority under number 625035.

Custom Business Finance Ltd aims to provide our customers with the highest standards of service. If our service fails to meet your requirements and you would like to report a complaint; please click on the link below;

https://www.assetfinancesolutions.com/contact/complaints-procedure/

Custom Business Finance Ltd
PO Box 5870 Sheffield
S11 OGB

Tel 0114 442 8008
Fax 0114 238 2020

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