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Demystifying asset finance for the Transport sector

John Fawcett, CEO, Transport Division, Close Brothers Asset Finance

I’ve been working in asset finance for so long now that I take it for granted that everyone knows what it is; yet, in our quarterly survey of 1,000 UK SMEs – which we call our ‘business barometer’ – the percentage of ‘yes’ responses to the question ‘have you heard of asset finance’, has remained stubbornly at around 40% - since 2013!

What is asset finance?

Asset Finance is an alternative form of funding used by businesses to obtain the equipment, vehicles, or capital they need to grow.

Common examples of asset finance products are:

  • Hire Purchase (HP) allows the customer to buy the equipment on credit. The finance company purchases the asset on behalf of the customer and owns the asset until the final instalment is paid
  • Refinancing (Capital Release): The finance company purchases the asset from your business and finances it back to you, releasing the equity raised into your cash flow. Repayments are calculated in line with the income stream that will be generated by the asset; at the end of the refinance term, you own the asset
  • Finance lease: The full value of the equipment is repaid to the finance company, plus interest, over the lease period. At the end of the term, the company 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
  • Operating lease: 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.

Types of assets financed

The beauty of asset finance is its flexibility – it can be used to fund any asset, including:

  • Trucks
  • Trailers
  • LCVs
  • Tippers
  • Tankers
  • Specialist bodies
  • Cranes
  • Cars
  • Garage & MOT test equipment

It makes the otherwise unaffordable affordable because it gives businesses access to the vehicles and equipment they need without incurring the cash flow disadvantage of an outright purchase.

Agreements can also be customised to the business’s needs, with flexibility on both the term and repayment schedule.

Why Close Brothers Asset Finance?

We are the largest, most successful and longest-established asset finance funder in the UK with over 30 years’ experience working with SMEs through all economic cycles – the fact is, there’s very little we haven’t seen or experienced.

Our team of transport finance specialists – many of who have transport industry background themselves - work with businesses across the UK to provide funding for both new and used transport vehicles and equipment. As sector experts, they understand how vital it is that you have the right tools at your disposal, so whether you are looking to expand your range of equipment or replace it, we can help.

Case study


Fuel Bunkering Services Ltd was set up in 2008 by Guy Aisthorpe. The family business has been trading for over ten years, delivering fuel to bulk users, including supermarkets. In the last year, the business’s growth had enabled them to purchase new premises; however, this put pressure on cash flow and required them to seek a finance solution.

The challenge:

Although the customer had an agreement with an existing lender, they needed £35,000 to be released as working capital into the business, which their existing lender was unable to support. They also required a quick turnaround to satisfy the traffic commissioners by renewing their operator license. Having been a previous customer of Close Brothers Asset Finance, Fuel Bunkering Services’ Director, Guy, once again sought out our advice.


Guy contacted Ian O’Leary, Regional Sales Manager at Close Brothers Asset Finance, who was already aware of their trustworthiness and strong industry knowledge, particularly with regards to asset values.

Ian and Guy had a confidential discussion about the challenge the customer was facing, and Ian suggested a Sale & HP Back product for Fuel Bunkering Services. Ian worked with the customer to ensure the solution was tailored to suit his needs. This solution provided the required £35,000 which was released into the business as working capital and was achieved within just three days of the original enquiry.

The outcome:

The solution enabled Fuel Bunkering Services to:

  • Release cash into the business quickly
  • Satisfy the traffic commissioners regarding their operator license
  • Reduce dependence on their existing lender who could not assist when the customer needed them

Commenting on the deal, Guy Aisthorpe, Director at Fuel Bunkering Services Ltd said: “The fantastic support and quick turnaround provided by Ian at Close Brothers enabled us to release the cash we needed and we’ll definitely be using them again going forward.”