What is asset finance?
Asset finance is a type of loan used by businesses to acquire assets that your business needs in order to generate income. This can be from office equipment to industrial ovens to factory machinery to vehicle fleets.
What are the benefits of asset finance
- Less capital required to start a business
- More practical for businesses that need to constantly upgrade their technology
- Easier access to the latest equipment
- Easier and faster to obtain with less paperwork than traditional bank loans
- More flexible than traditional bank loans
- Allows for more cash flow because you don’t need to pay the lump sum for investing in essential operating equipment
- If you run out of money, you only lose the equipment/car you financed
What are the disadvantages of asset finance
- The total cost of the equipment may end up costing more than if you paid the lump sum
- Cancellation issues, especially for long-term contracts
- Is non-tax deductible in terms of the profits gained from asset-financed equipment
What are the types of asset finance
There are many types of asset finance and terms vary from lender to lender. Two main types are:
- Hire Purchase: The lender owns your equipment for a fixed term. Once you have made full repayments within this period, the equipment belongs to you.
- Finance Lease: The lender owns the equipment you need, then leases it to you for a fixed term on a monthly payment basis. No deposit is required, but you do not have ownership after the agreement is over.
For more information and to discuss different lenders, financing options and strategies that are right for your business, feel free to contact JSP Financial Services to book a consultation. One of our friendly team will be more than happy to sit down with you and help tailor a financing package to your business needs.
We make appointments to meet our clients when it’s convenient. I.e. the best time for you. Out of business hours, in the evenings or weekend appointments can be arranged. Call or contact us today on (02) 8964 4928.