In everyday life, households need or want to buy things that are too costly for their current budget. This has given rise to consumers being able to buy a wide range of goods ‘on finance’. Most people don’t think twice about buying cars, furniture and even boilers ‘on finance’. Asset finance is pretty much the equivalent for businesses.
When a business needs equipment or vehicles, they can often be put off by the monetary cost and/or the impact that this could have on the business’s cash-flow. Many businesses see past the monetary cost and see the cost of not buying the asset; the benefits and positive outcomes of owning them.
It is important to remember that new (or newer) vehicles tend to have reduced running and servicing costs as well as increased reliability. New or newer machines tend to be more productive, more efficient and/or have increased functionality.
As businesses grow, they often buy an asset to help save a cost of outsourcing a function or even replace a manual function with an automated system. Again, this brings positive outcomes for the business.
By using asset finance to spread the payments for these purchases over a period of 2-5 years, the business can take advantage of the positive outcomes that the asset will bring without the huge cash-flow hit of paying for it outright.
Depending on the type of finance agreement there are also tax benefits to using asset finance. A good accountant will be able to advise how best to take advantage of these.
The range of assets that can be financed is vast and constantly evolving. Traditionally asset finance was associated with large plant, machinery, vehicles and agricultural equipment. Today, lenders have an appetite to finance IT equipment, fit-outs and even CRM systems and the list keeps growing.
Whether setting up or growing a business, asset finance can provide positive outcomes that support future plans whilst helping the day-to-day functions of the business. Most brokers welcome the opportunity to work closely alongside decision makers even at the early planning stages of a project in order to help maximise positive outcomes for the customer.
If you have an accountant, they should be your first stop for business advice. If you don’t have an accountant or they can’t help, BuBul has a wide range of experts available. For more advice on asset finance, why not contact our expert* James on LinkedIn here.
*We’ve picked experts we know and trust who are good at what they do. All of them will give you at least an extra 30 minutes free advice if you contact them and would then charge their normal prices. They don’t pay to be on BuBul and don’t give us any money from anything they earn as an expert.