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Asset finance solutions

Close Brothers Asset Finance offer a range of flexible funding options including Hire Purchase, Leasing and Refinancing.

What is asset finance?

Asset finance solutions are a flexible approach to funding that gives your business access to the equipment, vehicles, plant and technology it needs to perform, without compromising cash flow. These commercial finance options can be used for both new and second-hand assets, or as a mechanism for releasing value from those you already own. They include everything from heavy equipment financing to second-hand equipment financing options. 

Asset finance is a collective term for a range of funding solutions that are an alternative to traditional bank loans. Asset finance solutions include:

Over the past few years, asset finance has become the fastest growing finance option for businesses of all sizes, across all sectors.

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Who is asset finance for?

Asset finance is ideal for SMEs that are looking to invest in business growth through commercial finance.

It is a common predicament for SMEs; you can see the potential for growth in your business, but there’s not enough readily available working capital to pursue the opportunities. And yet, the best way to generate more working capital is through growth.

Asset finance offers an effective solution to this paradox.

Whether you need new equipment financing options or need to refinance existing assets, asset finance is perfect for businesses looking for the flexibility to grow the way they want to.

Who is asset finance for

Why choose asset finance?

Whether you need to purchase new equipment or refinance existing assets, asset finance is perfect for businesses looking for the flexibility to grow the way they want to. 

We have created this animated infographic to help explain the four key reasons why you might choose asset finance over traditional bank lending to help you grow your business:

  • It is flexible 

  • It gives you options 
  • It is predictable and stable 

  • It helps release capital for your business 

Why choose asset finance?

Release capital effectively

Types of asset finance

  • Hire Purchase
  • Refinancing
  • Finance Lease
  • Operating Lease

Hire Purchase - Spread the cost over time

Hire Purchase enables you to acquire an asset while paying for it in instalments over an agreed timescale – the term. At the end of the term, you have the option to purchase the asset outright.

Hire Purchase lets you spread the cost of your investment over the life of the asset, making it easier to budget. Hire Purchase is particularly suitable for acquiring vehicles, machinery, construction and commercial equipment with a resell value.

 

Benefits of Hire Purchase

  • More time to repaySpread the cost over the life of the asset
  • SeasonalityWe can structure repayments to take account of seasonal fluctuations in your cash flow
  • Keep controlYou are the owner of the asset for tax purposes and can normally claim capital allowances
  • Tax efficientYou can potentially offset your hire purchase interest and charges against pre-tax profits
  • Potentially reclaim VAT on the capital cost (there are special rules for cars) 

Refinancing - When you need a cash injection

Refinancing is a quick way to access the value of assets on your existing balance sheet and redeploy that value elsewhere within your business – for example, to fund a deposit on new equipment or unlock some working capital to ease cash flow.

Sale and HP Back is a form of refinance that can be used against most types of equipment, making it suitable for companies of all sizes, including sole traders. It works by us purchasing the asset and financing it back to you. Repayments are calculated in line with the income stream that will be generated by the asset and at the end of the refinance term, you own the asset.

This option applies whether you already own the asset or are using it under a finance deal with another provider.

 

Benefits of Refinancing

  • EfficiencyUninterrupted use of the asset
  • Spread the cost furtherWe can take over the finance agreement you have with another provider and extend the term
  • ChoiceGive your business a cash injection or use the money to buy other assets that may not be accessible through hire purchase or leasing agreements

Finance Lease - User benefits without the ties of ownership

Our Finance Lease arrangement lets you use the equipment you need without having to buy it outright. You pay us rent for the full use of it. The rental period (the primary lease term) is flexible and can be tailored to your usage needs and cash flow.

During this period, you will pay us the full cost of the asset, including interest.

Then, when you reach the end of the primary lease term you can choose to:

  • continue to use the asset by entering a secondary rental period
  • sell the asset and keep a portion of the income from the sale
  • return it to us

 

Benefits of Finance Lease

  • Low initial outlayQuick access to the asset you need without a heavy upfront investment
  • FlexibilityRental payments and lease periods can be designed to match your cash flow
  • Cash backReceive most of the income from selling the asset if you choose to do so at the end of the lease
  • Tax efficientRentals can potentially be offset against pre-tax profits
  • Reduce costs - Potentially reclaim VAT on rentals

Operating Lease - Keep your options open

Similar to a Finance Lease, an Operating Lease allows you to rent the asset from us while you need it. The key difference between the two is that an Operating Lease is only for part of the asset’s useful life.

This means you pay a reduced rental because the cost is based on the difference between the asset’s original purchase price and its residual value at the end of the agreement.

You get full use of the asset for as long as you need it, without the burden of responsibility of disposing of it or recouping its residual value.

 

Benefits of Operating Lease

  • Low initial outlay - Quick access to the asset you need without a heavy upfront investment
  • Freedom - Full use of the asset without having to buy it outright
  • Flexibility - Option to re-rent, purchase or return the asset at the end of the term
  • Pay less - Rental cost is reduced as it is based on a percentage of the original capital cost
  • Off balance sheet funding
  • Reduce costs - Potentially reclaim VAT on rentals

Sector specialists

Our asset finance managers’ in-depth knowledge of their industry sector ensures they see the big picture. This means that if you’re seeking asset finance to support new product development or diversification, they will be able to you help you explore your vision within the context of the wider market.

The individual customer is at the heart of what we do, but our lending decisions are underpinned by our sector expertise, which covers: 

Why choose Close Brothers for asset finance?

Just as no two businesses are the same, neither are asset finance providers. With us, it’s the combination of our people, products and principles that make the difference.

Our people

As you would expect, our people are experts in asset finance. But they also have extensive knowledge of your industry. That’s because we recruit people from within the sectors in which our customers operate.

This ‘shop floor’ experience means our asset finance managers really understand the challenges their customers face. You can rely on them to be a consistent and proactive point of contact, on hand throughout the life of the finance contract and beyond.

Our people

Our products

Our smart financial products are designed to promote business investment and growth. We don’t provide standard packages, but consider all relevant aspects of your business and then create tailor-made, flexible repayment schedules.

With minimal capital outlay, our asset finance enables you to invest in new equipment or refinance existing assets to make them work harder for you.

Our products

Our principles

We’re here to help your business fulfil its potential. So, we base our lending decisions on the overall health and plans for the business – not just a credit rating. But we’re careful lenders too; a decision that fails to take account of risk factors and wider market forces is not in anyone’s interest.

With local teams throughout the UK and Ireland, we can respond quickly to your requests for information and lending decisions. In fact, we aim to give you a decision within days, sometimes hours.

Our principles

 

To find out how we can help, please contact us today.