On the way to work this morning, perhaps you passed a building site where yellow plant machinery like trucks and cranes were secured using asset finance. Public transport is another sector where asset finance is widely used, but it’s just as prevalent in small businesses like agriculture, manufacturing or IT because sometimes leasing specialist equipment is the best solution for growth or development. Our FLA Skyline document gives some other examples.
Asset finance is a financial facility used to obtain equipment, and it has a number of advantages over conventional loans:
- It’s secured wholly or largely on the asset being financed, so this reduces the need for additional collateral.
- There’s more security for the user because the loan cannot be recalled during the life of the agreement
- Asset finance can be obtained directly from specialist providers, or indirectly through equipment suppliers or finance brokers.
- It offers ultimate flexibility because businesses have the option to replace or update equipment at the end of the lease period.
- It’s widely available through a network of around 5,000 equipment dealers and 400 brokers, as well as direct from finance companies.
For more information about Asset Finance please click Guide to Asset Finance.
Most companies providing direct asset finance in the UK are members of the FLA. Choosing to do business with one of them takes the guess-work out of selecting a reputable lender because all agreements would be conducted under the stringent standards set out in the FLA’s Business Code of Conduct.