Asset Finance

Asset Finance can often be referred to by different names, such as contact hire, operating lease, sale and leaseback etc. In reality there are two forms of Asset Finance which other products then fall under – Hire Purchase and Leasing.

Hire Purchase
At the end of the agreed period of finance, after all the payments have been made, you become the owner of the asset. This can be both automatically or after a final settlement, often referred to as a balloon payment. Usually as part of the agreement you will also be responsible for themaintenance and repair of the asset. For tax reasons, you are viewed as the owner of the asset and eligible to claim capital allowance tax.

Finance Leasing
As part of a leasing agreement the ownership of the asset is never passed to you, although some lenders will allow you to lease the equipment for a second term at a significantly lower rate. Leasing equipment with a view to purchasing it at a later date is sometimes a safer solution as equipment can become obsolete and loses its value. As you never become the owner of the asset the lender will claim the capital allowance gains and usually pass these savings on by offering you a lower monthly repayment. Another benefit of a finance leasing agreement is you can generally claim back the full cost of the lease as a trading expense.

Asset Finance is a way to enable small, medium and large businesses to fund the purchase of the assets that they need to run and grow their business including vehicles, equipment, plant, machinery and commercial buildings. Paying cash outright for such assets can be a significant drain on a companies cash flow and can be the least tax efficient way to purchase. Asset Finance can also ease the payment for assets as it can be done with regular payments over an agreed period typically …….. At SGD Financial we have a specialist team to help our customers who are looking for the most effective and competitive way of purchasing the assets they need to carry on running and growing their business.

Contact us to speak to one of our experienced advisors who will be more than happy to discuss your requirements or use our free no obligation quote service or apply on line