ELS Asset Finance: Fuel Your Business Ambitions with ELS Asset Financing
What Is Asset Finance?
Asset finance usually refers to two different parts of the financial service scope when it comes to corporate, commercial or personal financing.
On the one hand, companies can use their balance sheet assets, inventory or accounts receivable to raise finance or access lines of credit. Companies lending money have to be able to show prospective lenders that they’ll be able to service those loans, so all of these things can be taken into consideration.
Then asset finance can also mean raising lines of credit or financing for the express purpose of securing fixed assets. Typically, property, operational equipment or land.
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*For illustration purposes only. This is not an offer or quote for finance. if you are new start business or educational / local authority entity these guidelines rates are not applicable. Please contact us direct for a quote.
Why Should I Choose Asset Finance?
How Does It Work?
Asset finance can work in a couple of different ways. This will depend on which type of asset finance you’re needing – be it, financing against existing assets or finance to acquire assets.
Hire purchase is a form of asset finance that enables companies to spread the cost of asset acquisition over a set period; the lender will retain ownership of the asset until the terms of the loan agreement have been met in full.
Asset refinance allows you to release cash into your business using your existing assets. You can also use it to consolidate debt or provide security when structuring a deal. Depending on your situation, lenders will typically lend up to 80% of your asset’s value.
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What Types Of Asset Finance Are Available?
There are generally five different types of asset finance available:
Hire Purchase or “HP” is a type of asset finance that allows the lender to purchase the asset on the behalf of the borrower. Once acquired, the borrower will make regular payments of a set period to the lender and over that period eventually gain outright ownership of the asset.
These leases are a very popular option for asset finance because of the freedom and flexibility that comes with them. In this case, the borrower enters a contractual agreement with a lender that allows for the borrower to use the equipment for the specified purpose, for the agreed period.
This lease works similarly to an equipment lease only the equipment leases are normally for shorter terms whereas operating leases are typically longer, although not for the full life of the asset. This means that operating leases are usually cheaper since the asset is being borrowed for a much shorter period than with an HP or full equipment lease.
This lease has all the rights and obligations of ownership and is undertaken by the borrower for the duration of the lease. The borrower holds all responsibility for the maintenance of the assets.
When an asset has been fully paid for and has been acquired in full by the borrower, then additional finance can be obtained by using the asset as security for an additional cash amount.
Benefits of Asset Finance with ELS
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We offer a wide range of tailored, specialist financial solutions for businesses and we want to hear about your business or project and work together to make it a success. Call 0116 389 3839 or complete our form.
Frequently Asked Questions
LEase finance - asset finance - EQUIPMENT LEASING - HIRE PURCHASE
Lease Finance is a financial arrangement that allows you to acquire the equipment you need without a hefty upfront cost. Instead, the cost is spread over manageable monthly payments, freeing up your capital for other business needs.
In a typical Lease Finance agreement, ELS purchases the asset you require and leases it to you for a predetermined period. You make monthly payments for the duration of the term, after which you have various options, including continuing the lease or purchasing the asset.
Lease Finance agreements usually last between 2 to 6 years. However, there are special cases where the term can extend up to 7 or even 10 years. The length of the term affects both your monthly payments and the total interest payable.
While buying outright eliminates interest costs, it also requires a significant initial investment. Lease Finance allows you to spread these costs over time, preserving your cash flow for operational expenses and potential growth opportunities.
From energy-efficient technology to office equipment, ELS offers Lease Finance solutions across a wide range of sectors. Whether you're in education, energy, or any other industry, we've got you covered.
Absolutely. Lease Finance is often more accessible for start-ups than traditional business loans. The asset itself serves as security, reducing the lender's risk and making it a more viable financing option.
Yes, Lease Finance payments can usually be deducted from company profits before calculating tax, offering you potential tax advantages.