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Asset Finance
What is Asset Finance?
Asset Finance is a flexible form of business funding in which the security provided to a lender is largely made up of the vehicles, equipment or plant and machinery used by businesses in their day to day operations.
Typically a business will use asset finance when needing to purchase or acquire specific tangible, moveable business assets and when the initial capital outlay to purchase these assets would be more than a business can afford to pay in one lump sum, or in which it is more practical, from a cashflow and/or tax perspective, to spread the cost of purchase over the useful economic life of the asset.
Whilst asset finance is perfect when purchasing new or used business assets, it can also be used to release cash in assets a business may already own, via asset refinance.
The UK Asset Finance market is huge with dozens of high street banks and specialist lenders, and hundreds of independent brokerages able to link businesses with bespoke funding solutions tailored to their business type and needs.
Benefits of Asset Finance
Asset Finance offers many benefits to UK businesses, including:
Cashflow Benefits
Without sufficient cash reserves, every business will eventually fail. VAT Loans provide an extra stream of funding that can be used in addition to bank overdraft or invoice finance facilities, without impacting on these existing facilities. This added stream can even out cashflow peaks and troughs. Not only that but the extra working capital available can be used to reduce costs elsewhere, and is available for other business growth or investment needs.
Trading Benefits
By having the necessary vehicles or machinery businesses can acquire or service contracts over many years. The finance costs are then covered by the additional turnover generated by the business, year after year, from having use of the assets in the first place.
Growth Benefits
Many firms simply would not have the cash available to purchase the assets they need to operate, so without asset finance they could never grow, and many could never start. Asset finance allows growing companies the funding they need to expand the scale of their business allowing them to service more clients, employ more people and win more contracts.
Tax Benefits
The UK economy depends on UK businesses growing and so the government offers tax incentives to encourage firms to invest in their businesses by investing in new vehicles, plant and machinery. Whilst we are not qualified tax advisors, and would always recommend businesses discuss their personal situation with their own accountant, asset finance does provide tax advantages to firms in most cases.
Security Benefits
All forms of lending require some form of security offered by the borrower to the lender. Overdrafts, for example, will typically require the business to offer a debenture over all business assets to their bank. Sometimes this can extend to charges over directors’ homes. Security in Asset Finance, on the other hand, is typically tied only to the asset being funded, for example the truck, or bus or printing press or CNC engineering machine that is being purchased. The lender’s security will be the asset itself so in the event of default the asset is recovered by the finance company. This means that this lending doesn’t necessarily need to impact on a businesses borrowing requirements elsewhere, and the business owner can be confident in the security they are making available.
Get Your Asset Finance Quote
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How Asset Finance Works
We make your VAT loan journey as simple as possible.
As your trusted business finance partner, we work closely with you every step of the way to ensure a seamless process:
01
Consultation and Options
From your first call, email or completed webform we will act as your trusted partner, understanding your objectives and putting together options for you to consider.
02
Information Gathering
We may need to ask you some general business questions and ask for some financial information from you in order to carefully prepare your personalised quotation from our funding panel.
03
Funding Application
Once you have reviewed your no obligation quotations and are happy to proceed we will prepare your application and liaise with the lenders to secure the funding you need.
04
Agreement Finalization
Unlike some brokerages, we do not charge you any payments or fees for our brokerage service, so your engagement with us is entirely cost, risk and obligation free.
05
Deal Activation
From here we ensure everything is finally packaged and presented to the finance company who will activate your agreement and pay HMRC directly, or, subject to approval, to you, allowing you to enjoy the peace of mind that you wont incur any late payment surcharges and have the added benefit of the additional working capital.
Types of Asset Finance
Understanding the various forms of asset finance is important for businesses seeking flexible solutions to acquire essential equipment and resources. Explore the two main forms of Asset Finance are Hire Purchase and Leasing.
Hire Purchase(HP)
Hire Purchase is a well-established method of financing for companies that wish eventually to take ownership of business assets.
The finance company buys the asset on behalf of the customer, who then pays an initial deposit. The remaining balance, plus interest, is then paid over an agreed period. During this period, ownership rests with the finance company, who is effectively hiring use of the asset to the customer.
Once the final payment is made, ownership transfers to the customer.
Lease Finance
Under a commercial agreement, the leasing company (known as the lessor) buys and owns the asset.
The customer (or lessee) then hires use of the asset, paying rental over a fixed period. At the end of the contract, the customer usually has a choice of extending the lease, buying the asset or simply returning it.
There are two main types of leases, namely Finance Leases and Operating Leases.
Why choose MacManus Finance for VAT Loans?
UK firms are well advised to engage the service of a skilled independent brokerage who can save them time and money by accessing the widest panel of options, who are Authorised and Regulated by the Financial Conduct Authority and are full members of the National Association of Commercial Finance Brokers trade association, as membership of both requires firms to demonstrate the highest standards of integrity and submit to consistent monitoring of activities, providing the business owner with confidence in the firm they have chosen to work with.
MacManus Asset Finance are one such firm – directly authorised by the Financial Conduct Authority, full members of the National Association of Commercial Finance Brokers, and with a customer base of almost 300 UK businesses whom we have supported for over 15 years.
This credibility combined with an extensive panel of asset finance providers, including some of the best priced, and most flexible lenders in the marketplace provides a winning combination.
Our business motto is “Never Just a Number” – and we take pride that our clients never feel like they are just a number to us, as so many business owners are made to feel by larger financial institutions.
Your business success is our business success, we never take our clients for granted, and will always aim to deliver more than our clients expect.
Frequently Asked Questions
We can finance all types of vehicle, plant & machinery used across every industry types.
Some of the businesses we have helped finance are involved in haulage, agriculture, engineering, print, manufacturing, construction, food production, catering, crane hire, fitness, healthcare, media, plant hire, plastics and waste management.
The assets funded include cars, vans, HGVs, bus and coach, agricultural machinery, construction equipment CNC machinery, Printing presses, yellow plant, production lines, ovens and catering equipment, fixed and mobile cranes, gym equipment, medical machinery, film and editing equipment, IT and telecoms, plastic injection moulding machinery and recycling equipment.
Whatever vehicles, equipment, plant or machinery you need there’s a very good chance we will able to assist you.
Our minimum transaction size is £10,000 and we have no maximum amount.
Yes. We finance many used assets. Some funders do have age limits on assets they can fund but in 99% of cases we will find a solution, even for assets over 15 years old.
The minimum finance period is 12 months (1 year) and maximum 84 months (7 years).
Most clients finance assets between 3 and 5 years depending on the cost and type of asset.
We can discuss all your options on a case by case basis.
In most cases a minimum deposit of 10% of the pre-VAT asset cost is requested by the finance companies – some will also expect the full amount of VAT to be paid up front, although some offer VAT deferrals.
Clients can put down any amount of deposit they want above this 10% minimum to reduce the amount of borrowing required.
Smaller deposits below 10% are possible and again can be negotiated on a case-by-case basis.
We will always deliver the best rate of finance possible based on your specific circumstances.
Our extensive funding panel means we can help businesses in every situation, as such every client will receive bespoke pricing based on their credit worthiness, asset type, market conditions and industry appetite that varies from time to time.
Our rates, for the best clients, are market leading and you should have no hesitation in contacting us if price is your motivator.
We are super quick. We will provide you with indicative terms within 5 minutes of a conversation.
When you ask us to proceed to application, we will request some financial and business information from you to support the application.
Once received your application will be sent to the finance providers within 60 minutes.
Funders have varying service times from 1 hour to 5 days, but most are around 1 day for a decision.
Once agreed we let you know and ask if we can contact your supplier to request an invoice.
When we receive the invoice we will get finance documents to you ready to sign within 60 minutes and when we get these back from you we can get your supplier paid the next day.
It’s possible to get a deal paid out within 24 hours of inquiry, however we are relying on you getting us what we need quickly.
Bottom line… we will move as quickly as you do and will move heaven and earth to deliver to your timescales.
Yes, yes, yes.
If you have an ongoing need to acquire assets you need to ask us about our credit line facilities.
For no cost we will put in place a credit facility that will sit in the background and can be drawn down as and when you need to purchase your assets.
This means you wont have to wait for credit approval each time you need to add or replace your assets.
Once agreed you can get assets paid out within 24 hours and have complete confidence in the rate of finance your going to get.
This is a huge time saver for busy Finance Directors.
Many funders will now allow you to defer the VAT payment on the purchase price of your asset, for a period of 3 months.
This allows you to reclaim the VAT from HMRC before making the payment to the finance company along with your usual third monthly payment.
A fantastic cashflow tip!
We have active lines with dozens of providers, including most high street bank and most of the major asset finance providers plus a number of niche players.
We haven’t been asked to fund an asset that we weren’t able to place somewhere.
Nothing. Zero. Not a penny!
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Business Moneyfacts Asset Finance
Broker of the Year 2024
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