Asset Finance
What is Asset Finance?
Put simply, Asset Finance is the provision of credit or leasing facilities
to fund your acquisition of business assets. Please click
here for an explanation of standard asset terms.
Security is primarily taken on the asset concerned and is generally a
stand-alone facility.
The cost is spread over a period up to the useful life of the asset.
Assets that can typically be funded in this fashion are generally of a
tangible nature with a readily available resale market. MHJ Finance are
also able to offer finance at High Street Bank
Rates.
The Benefits Of Asset Finance
The cost of the asset can be linked to the income stream it generates.
Relatively straightforward facility to arrange.
The rental profile is agreed at inception allowing simple cash flow management.
It is a stand-alone facility that leaves other lines of credit intact
for working capital.
There are many advantages to leasing when compared with other financing
alternatives.
Cash Purchase
Outright purchase has an immediate impact on cash flow.
There may be an opportunity to use the money elsewhere within the business
or on a deposit.
The asset(s) is shown on the balance sheet.
Writing down allowances at the appropriate rate are claimable each year;
leasing payments however may be 100% offset against
taxable profits.
Outright purchase can reduce your flexibility, whilst leasing gives you
the ease and flexibility to upgrade and add to your equipment
as technology and your needs change.
The true cost of leasing payments diminishes over time as the value of
money depreciates.
Bank Loan
Additional bank borrowing will utilise some of your available credit
and may impact on your ability to obtain or increase an overdraft to fund
working capital. A lease, in comparison, is unlikely to have an impact
upon credit lines.
The asset(s) is shown on the balance sheet
The lender may ask for additional security - e.g. a debenture over book
debt or a charge over a freehold property.
Loans may be repayable on demand, whereas a lessor cannot 'foreclose'
on the transaction whilst payments continue to be made.
100% of leasing payments may be offset against taxable profits, whereas
only the interest element on loans and writing down allowances are claimable
against tax.
Bank Overdraft
An overdraft is a short term finance facility to fund working capital,
not asset acquisition, and is therefore not appropriate for that purpose.
Interest is normally variable and calculated daily.
Repayment is on demand.
The asset is shown within the balance sheet.
A lease allows easier budgeting - you know in advance what you will be
paying irrespective of changes in interest rates.
Hire Purchase or Leasing?
There are many types of agreements available, for an overview of the
two main types of Leasing please read Finance
Leasing and Operating Leases.
Most items of equipment in normal use within the business or industrial
environment may be obtained through leasing or hire purchase. Equipment
can cost as little as a thousand pounds, or more than £10 million
in the case of some major industrial plant. Some typical items are listed
below: Fixed and Variable Rates available on:
- Plant & Machinery
- Business Cars
- Commercial Vehicles
- Agricultural Equipment
- Hotel Equipment
- Medical & Dental Equipment
- All types of machinery
- Office Equipment
Generally a current copy of your trading accounts are required plus 3
- 6 months worth of bank statements.
How to Apply.
Apply online: Trading
Over 3 Years - Trading
Under 3 Years
Download forms: Trading
Over 3 Years - Trading
Under 3 Years
(PDF version)
Click Here to request a copy of the correct forms via mail or
fax.
Don't forget that even in the event of us not being able to offer an
asset finance or leasing solution, we may still be able to help, by offering
a business loan.
Please note that we also offer the following additional services: -
~ Commercial Mortgages ~ Bridging Loans
~ Sale and Leaseback Facilities ~ Commercial Insurance ~ Factoring
~ Export Factoring ~ Invoice Discounting ~ Trade Finance
~ Venture Capital ~
If you have any further queries regarding the same please do not hesitate
to contact me via E-Mail on info@MHJFinance.co.uk
or call FREEPHONE 0800 358 3033 between 8a.m - 10p.m Mon to Fri and 8a.m
- 1p.m Saturday.
 
Consumer Credit Licence No. 488590.
(Top of Page)
Free
Phone:
0800 358 3033
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