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What is Asset Finance?
Asset finance uses business assets as a way to secure finance to help established companies to fund big projects or cover a surge in growth. Asset finance relates to loans that are granted based on the value of the assets offered as security by a business.
This type of funding usually uses assets such as equipment and machinery to secure the loan, but ‘soft assets’ such as medical equipment or IT software can also be used. The amount of funds a business can borrow will be assessed on affordability and asset type.
Why choose asset funding?
Asset finance allows SMEs to acquire much needed capital to help expand and grow the business without affecting cash flow. This product also allows companies to release much needed capital from already owned equipment or machinery.
Key features of asset finance
- Suitability: Businesses looking to purchase any asset without the need for upfront capital. We can also look into refinancing any existing assets.
- Purpose: Used to either lease or purchase an asset.
- Amount: Loans ranging from £1k – £2m, subject to the type of asset and affordability.
- Term: Up to 7 years, depending on the type of asset and credit worthiness of the business.
- Cost: Variable, depending on the asset.
- Security: The asset will be secured until a full repayment has been made. Some lenders may also ask for a personal guarantee.
- Speed: Applications can be processed within 24 hours from receiving a full proposal.
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How asset finance works: What can you finance?
There are two types of assets that a business can finance: hard and soft assets. An important factor to consider when it comes to deciding whether an asset is hard or soft is its resale value. Hard assets still have value if they are used, whereas soft assets typically have a low resale value.
- Hard assets: These are typically machines such as agricultural machinery, vehicles, or manufacturing equipment.
- Soft assets: These assets can be catering equipment, gymnasium equipment, medical equipment, or IT software.
While we can finance all sorts of assets for almost any business, most lenders will have a preference over what they can finance.
Asset finance products
The asset finance product you choose for your business will depend on whether you are looking to own, rent or release cash tied up in already owned assets. We can help you make the right decision.
Spread the cost of purchasing an asset over a set amount of time. Once you’ve paid the lender in full, the asset is yours to keep.
Lenders buy the asset and you pay a monthly fee to rent it. At the end of the agreed term, you can extend the lease, pay the remaining balance to buy it, upgrade to a new model or return the asset back to the lender.
Release cash into your business using your existing assets. Can be used to consolidate debt or provide security when structuring a deal. Lenders will typically lend up to 80% of your asset’s value.
Asset funding eligibility: Who is asset finance for?
Asset finance is generally a short-term funding solution for businesses who either need to purchase an expensive asset or wish to release cash by using existing assets. Most businesses will be able to apply for asset finance, but if you’re unsure which option best suits your needs, don’t hesitate to contact our team.
Asset Finance Solutions with Aurora Capital
We’ve spent years building up solid relationships with trusted lenders, putting you in a comfortable position when it comes to applying for asset finance for your business.
By using our service, you can be assured that you’ll receive a genuine offer with no catch and plenty of benefits. As we’ve spent time getting to know our lenders, we’ll also be able to help you get competitive rates.
Why choose Aurora Capital for asset finance?
Aurora Capital are experts in business funding in all capacities, and have had years of experience helping clients raise the necessary capital to grow and expand.
Our powerful decision engine pairs businesses looking for quick loans with trusted lenders offering great interest rates and other repayment terms. Whether you’re looking for asset finance, secured or unsecured business loans or property finance, we have the expertise to guide you towards the best decision for you and your business.
Asset Finance: FAQs
How long can my business finance an asset for?
Asset finance is usually provided for anywhere between 1-7 years. The asset finance company recoups the purchase cost of the asset over the agreed period, plus interest. The length of time the finance is provided for also depends on how long the asset is going to be ‘usable’ for, as well as how quickly the lender wants the money back. As a business borrower, you’ll have to show that your business can afford to make the agreed payments.
How much can my business borrow?
The amount you can borrow will depend on your business and time you have been trading. However, as a general rule, we finance equipment with a value of £1k upwards. The amount you are able to borrow will also depend on what type of asset you are trying to finance or refinance.
Can I refinance equipment or machinery that my business already owns?
Yes you can, however there are certain criteria surrounding the age and condition of equipment that we will refinance. This can include the type of equipment and the date that you purchased it.
What is lease finance?
Lease finance is a way of renting an asset over a certain period of time. With this type of finance, you will never own the asset, and you will have to return it at the end of the term. Lease finance allows businesses to keep up with new technologies without the need to sell at the end of the term.
What type of businesses do you lend to?
We lend to all types of businesses. Whether you’ve been established for decades or months, we can provide asset finance for businesses of all sizes, in all sectors.
What is hire purchase?
Hire purchase is a straightforward way of purchasing an asset and spreading the cost over time with affordable monthly repayments. You will be responsible for the maintenance and associated costs, as you will have full ownership of the asset once your finance term ends.
How do I find a business asset funding lender?
As funding specialists, Aurora Capital provides SMEs with business loans that are suited directly to their needs. Over the years we have built up relationships with multiple lenders who can provide fast and flexible business funding, meaning we can offer a wide array of business loan types with numerous benefits and competitive rates.
Finding the right funding is often a long-winded process, with plenty of variables to consider from all the different providers. Our finance experts can help, providing you with a list of the best deals and rates.
Get your free, no obligation quote today!
Prefer to talk? Call us on 020 3355 7462
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