Asset Finance
Hire Purchase
Hire Purchase agreements allow businesses to gain ownership of assets without requiring hefty up-front payments putting a strain on working capital.
The agreement would involve the lender purchasing the asset in question, then the business ‘hires’ the asset from the lender by paying them an initial upfront deposit (this is usually 10% of the value of the asset + the full VAT bill for the asset) followed by regular instalments at an agreed rate.
As the finance is secured against the asset itself, there is normally no need for a business to put up additional collateral.
Depending on the agreed terms, the business will either own the asset once all of the instalments have been paid or will have the option to purchase it with a final ‘purchase fee/balloon’ payment.
Hire purchase agreements can be used to finance the acquisition and use of a wide range of assets. From equipment and machinery to vehicles and software, our panel of lenders can offer facilities to finance a wide range of asset types.
Key benefits
- Provides quick access to assets business may not be able to afford otherwise
- Frees up capital for other purposes
- Generally high rates of approval as the lender will own the asset.
- Most suitable for businesses looking to own the asset in the long term.
Finance Lease
A finance lease allows a business to use an asset without having to purchase it up-front. It works by the lender acquiring the asset, and the business leasing it from them in return for regular payments.
Finance leases can be used when the leasing period is for the entirety of the asset’s useful economic life, as opposed to an operating lease which allows a business to rent an asset for a period of the asset’s useful economic life.
The lease will run for the agreed term and at the end of the term, there can be various options available such as extending the lease agreement, return the asset or sell the asset on behalf of the lessor.
Key benefits
- Can free up cash flow for other uses
- Removes the need for hefty up-front payments for assets, spreading the cost over a chosen period of months or years
- Fixed payments over a defined period make budgeting for the assets easier
- Access and use of the assets is available immediately, allowing businesses access to assets they may not otherwise be able to afford.
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Operating Lease
An operating lease allows a business to rent an asset from a Lessor. The asset is purchased by the lessor and then leased to the business in return for regular rental payments.
The difference between an operating lease and a finance lease is that, with an operating lease, you will only rent the asset for a portion of the asset’s useful life-cycle. This negates the requirement for a business to have to deal with the disposal of an asset upon the conclusion of the lease agreement.
Key benefits
- Negates the need for a hefty up-front payment, freeing up cash flow.
- A business can use an asset without having to purchase or own it outright
- Rental payments can be less than that of other leases, as they will only have to cover a portion of the asset’s total value.
- Operating lease can be good for assets that depreciate quickly or need updating regularly.
Asset Refinance
Asset refinance, which can also be called asset sale and lease back, can help free up cash flow for businesses who have lots of value stored in assets.
Asset refinancing is a method of raising finance against the value of assets owned by a business whilst allowing them to retain control of the asset so that it can be used for day-to-day business activities.
You do not have to own 100% of the asset in order to raise finance against it.
Asset refinancing is used to raise capital against assets you already own. In contrast, asset financing such as hire purchase or lease agreements provide access to assets the business doesn’t currently own.
Key benefits
- Good for businesses that have lots of value tied up in assets and need cash to operate.
- Don’t need to own the asset outright to be able to raise funds against it.
- Flexible repayment terms – allowing businesses to spread the cost over years if needed.
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With three decades of experience, Clever Commercial provides bespoke property financing with competitive rates and flexible terms. Your future is our priority—let’s achieve it together.
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OUR CLIENTS THOUGHTS
RECENT TESTIMONIALS
Marc worked over many months to help me find the right financial product to suit my complicated refinancing project. Having identified the right product, Marc then worked for many more months to help me get the financing completed. I had so many issues that I had to face and at every obstacle Marc was on hand to help me to resolve it, and very often took it upon himself to do it for me. Marc went for beyond just brokering a good deal for me, he was my partner in making this happen. I could not have done this without his support. Thank you Marc for being so calm and patient and having faith when I had lost mine!
I. Knight
Marc has provided our company with excellent service and advice. He has vast experience and knowledge, and is able to advice on the most suitable lenders given our requirements.
Especially during the legal stage of the lending process, he facilitates and communicates with lenders in a way we would not be able to ourselves.
We would certainly not be where we are without his services. Highly recommended.
M. Dunn
The service provided for my bridging loan was second to none. The support I received was very professional and generous.
I would highly recommend Clever Commercial to everyone and anyone who needs a professional, caring and competitive rate for it’s loan or any kind of finance.
D. Dezfull
Marc has provided our company with excellent service and advice. He has vast experience and knowledge, and is able to advice on the most suitable lenders given our requirements. Especially during the legal stage of the lending process, he facilitates and communicates with lenders in a way we would not be able to ourselves. We would certainly not be where we are without his services. Highly recommended.
P. Strøm