What to Consider When Comparing Asset Finance Loans?

Asset financing is a great option if you need extra financial support when purchasing new or used assets and equipment for your business. Upgrading equipment or expanding your business can be some of the most costly outgoings you face, so asset financing can help alleviate the pressure and spread the cost of your spending. 

But with so many asset financing loan options and with such a range of fully flexible plans available, which one is right for you? Here, we’ll be exploring and comparing asset finance loans to determine what you should consider to ensure you get the plan that’s best suited to you. 

Millbrook Business Finance has decades of experience with providing high-quality asset financing solutions to businesses, regardless of the size or industry. All of our payment plans are fully flexible and come with competitive interest rates, with an application process that is both quick and simple.  

Comparing asset finance loans 

Asset finance is a financing option that is specifically used on assets such as vehicles, plant, machinery, company equipment or even fit-out projects. Assets can be expensive and it will often make sense to have financial support when purchasing something new. To avoid a one-off cash payment, asset financing is used to spread the cost of your payments over a longer, more manageable period of time. The period of time is often completely negotiable, although you will often pay larger instalments the shorter your borrowing time. Alternatively, you may end up paying more in interest for borrowing over a longer period.

What types of asset finance are available?  

Because asset financing is used to purchase assets or equipment for your company, there are a range of different options available depending on your desired situation. To make comparing asset finance loans simpler, we’ve provided a description of the solutions that are available to you.

Hire & lease purchase finance

Hire and lease purchasing is used for occasions when you want to own the asset. Your loan will be paid for in regular instalments, although you have full use of the asset as you pay it off. Full ownership is acquired when your payment is paid off.

Finance lease

A finance lease differs from hire purchase finance as you will not have full ownership of the asset once payments have been completed. You still have full use of the asset although the finance company owns it and rents it to you over a period. Upon completion of the agreement you can choose to hand the asset back to the finance company, sell it to a third party or retain its use through secondary period rental.

Refinance 

Refinancing is a finance facility that can be used to release equity in assets that are nearing the end of their finance agreement or are already unencumbered. This can be useful to release funds that can be used in other areas of your business, wherever you need it most. Some examples are cash flow, working capital, VAT or tax bills and so forth. Refinancing uses the same structure as either a hire purchase or a finance lease agreement.

Key considerations when choosing an asset finance loan

How much do you want to borrow? 

Although obvious, it’s essential you know the price of the asset you wish to purchase so you know how much to borrow. For items that are custom-made, it is essential you have a full quote and understand the funds you need.

How much do you need to borrow? 

The amount you borrow will directly inform the best type of asset financing option for you. Not only this, but it will determine the repayment terms of your deal.

What assets do you want to buy/refinance?

Some financing companies are better suited to financing in certain industries or sectors. It’s best to have a good idea of what it is you want to finance to ensure that you find the right financing company for you. At Millbrook Business Finance, we have experience in construction, leisure and hospitality, retail and transport to name just a few. Visit our asset financing page to see the full list of sectors we cover.

How long should your repayment period be? 

Having an idea of how long you would like your repayment period to be is recommended. Longer periods will mean your individual repayments are smaller, although, with a smaller loan period, you will be paying your money back quicker and with less interest.

Do you want to own the asset once your payments are complete?

When comparing asset finance loans, it’s important to consider whether you want to own the asset once your repayment period is over. Hire purchasing finance will mean that you will fully own the asset, but with a finance lease deal the finance company still accepts full ownership. Leasing can be a more tax-efficient option as rentals can often be offset against taxable profits.

Apply for an asset finance loan with Millbrook

Applying for asset financing is a quick and simple procedure and can provide substantial financial support within days. Simply submit an enquiry - either by filling in an eligibility form or by calling 0333 015 3301 - send your application and await approval, which is usually within 48 hours. Once approved, the final step is signing it and sending it back to us where we process, activate and release your funds.

Millbrook Business Finance has decades of experience in asset financing in a range of different sectors and industries. Our asset financing options are completely flexible and can be tailor-made to suit your business's individual requirements. Comparing asset finance loans is often confusing, but with the help of our fully qualified team we’ll support you and ensure that you are getting the right financing for you

Visit our contact page and speak with a member of our team today.