What Is Commercial Asset Finance?

If you’re looking to invest in new machinery, IT equipment or vehicles for your business, but aren’t able to afford to buy it outright, you may want to consider commercial asset finance. This type of funding allows you to spread the cost of the purchase over a period of time and can be applied to anything from hard assets such as cars, trucks or machinery to soft assets like IT equipment and office furniture.

Unlike many other forms of business finance, this type of financing is secured by the actual item that’s being financed. This means that if your company fails to keep up with repayments, the lender can repossess the items and use them to generate revenue themselves. However, this is typically a last resort and the lenders will do everything possible to avoid this occurring.

Hard asset finance commercial asset finance involves the purchasing of a specific piece of equipment and then leasing or selling it back to your company over an agreed term, with monthly payments and a fee for usage. This option is often used by companies that need to purchase high value goods or those that require them for daily operations, but don’t have the cash available to do so upfront. This can be particularly useful for technology or manufacturing businesses that need to be able to react quickly to changes in their industry and technology, as it can allow them to upgrade faster than they would have otherwise been able to.

Soft asset finance is less well known and can apply to software, fixtures, fittings or even equipment such as computers or printers which don’t have any resale value or are prone to rapid depreciation. It is typically offered by lenders who specialise in this type of financing and will usually have an online application form for you to fill out. This will usually include details of your business such as its credit history and its past trading performance, together with a list of current assets that can be pledged to secure the loan, and evidence of your ability to make the repayments.

Obtaining this kind of business funding can be easier than it might seem, and the rates that are available can be lower than those associated with some other types of financing. This can be particularly helpful for newer, unsecured businesses that don’t have the trading or financial track record to obtain a bank loan.

Choosing the right type of financing and lender for your business can be difficult, especially if you’re already short on resources. By using the Swoop marketplace, we can help you compare and choose a solution that best suits your requirements and your budget. If you’re ready to find out more about asset finance, we invite you to sign up to the marketplace today and let us do all of the hard work for you. Simply complete the simple form and we will get back in touch with a selection of offers to suit your needs.