Commercial asset finance is a great way of keeping cash generated within the business, rather than spending it to purchase assets or equipment outright. The most traditional form of asset finance is a hire purchase, when you own the asset outright. Interest charges are fixed or variable, and the terms are bespoke to suit your individual cash flow.
A finance lease differs slightly to a hire purchase, as you never officially ‘own’ the asset. It is more of a rental over a certain timeframe that you choose. At the end of this rental period, there are usually 3 options:
- Continue with use of the asset by extending the rental period
- Sell the goods on, on behalf of the finance company
- Return the asset back to the finance company
This is the most popular method of commercial asset finance, as it allows for a quick cash injection into the business. The perfect solution to aid business growth and expansion.
Here at Thompson & Richardson Commercial Finance, we are on hand to advise you on the best commercial asset finance, to suit your individual needs and future plans. As vehicles/equipment tend to depreciate over time, they will need replacing over a shorter term. This means they will lose more value over time, unlike a commercial property, which is likely to have increased in value.