Purchase new equipment and vehicles with asset finance from First Oak Capital
Asset Finance: A Smart Way to Fund Business Growth
Every business eventually reaches a stage where acquiring large-ticket assets becomes essential for growth. Vehicles, equipment, or machinery play a crucial role in improving efficiency and taking operations to the next level. However, purchasing these assets outright with business capital can strain cash flow, limiting growth in other areas and creating financial setbacks.
Instead of depleting cash reserves, businesses can take advantage of asset finance to spread the cost over time. By financing these purchases, companies maintain working capital for daily operations while benefiting from essential equipment. Additionally, comparing interest charges and fees against potential productivity gains and tax benefits ensures an informed decision.
Maximise Tax Benefits with Asset Finance
Unlike cash purchases, asset finance provides tax relief on both capital and interest. Since most equipment depreciates quickly and can become outdated, financing allows businesses to upgrade more easily without making large upfront investments.
At First Oak Capital, our asset finance solutions empower businesses to acquire essential equipment that might otherwise be financially out of reach. Furthermore, these purchases can be offset against taxable profits, enhancing overall financial efficiency.
Businesses typically choose between two main types of asset finance: leasing and hire purchase. Hire purchase enables businesses to take ownership of the asset after completing all payments, whereas leasing allows for continued use without ownership, offering flexibility and lower initial costs.
Now, the key question remains—should you lease or buy your assets? Let’s explore which option suits your business best.
TAKING ADVANTAGE OF ASSET FINANCE
Borrow £10k – £500k
Fixed Rates from 7.9%
Receive funds in as little as 48Hrs
Improve cashflow
Use for almost any reason
Leasing allows you to access new or used equipment by renting it for a fixed period, without owning the asset. At the end of the agreement, you can either return the asset or continue leasing if needed.
Several types of leases exist, including equipment leases, finance leases, and operating leases. Your First Oak Capital advisor will gladly help you determine the best option for your purchase and circumstances, working alongside your accountant’s advice.
Instead of paying VAT upfront, you spread the cost over the agreement’s term. Additionally, you can reclaim VAT, while the remainder of the monthly payment qualifies as a tax-deductible expense. Since leasing offers fixed costs, you can reliably budget for payments throughout the agreement’s duration.
The finance provider retains ownership of the asset until full payment is made. If you miss payments, the lender may repossess the asset.
Hire Purchase agreements offer a strong alternative to leasing, allowing you to take ownership of the asset once you complete all payments. If you prefer ownership and expect the asset to have a long and useful lifespan, this option may work better for you. Additionally, the asset appears on your company balance sheet, and you can offset depreciation against tax. Although you must pay VAT upfront, you can typically reclaim it within a few months.
Ultimately, choosing the best financing method for your business depends on your available cash and your accountant’s recommendations. Fortunately, you can count on us to clearly explain the pros and cons of each option. With our guidance, you can confidently make an informed decision that aligns with your business needs.
FUND THE GROWTH OF YOUR COMPANY
Business Finance From £25K to £1M. We strive to offer simple, pain free business finance to UK companies and provide the highest levels of personal service.
FAQs
An asset is anything that has intrinsic value like vehicles, machinery, buildings or equipment. Generally assets are used in the day to day running of your company.
You can apply for anything between £1000 and £10m depending on the lender and any limits that they may set on your business.
Typically between 6 months and 7 years
With a lease, the finance company buys the asset and then rents it back to you. As a result, you only pay VAT on top of the rental payments, effectively spreading the cost over the loan term. On the other hand, with hire purchase, you must pay the VAT upfront and then reclaim it at the end of your VAT quarter. After that, you only finance the pre-VAT price, minus any deposit you choose to contribute.
The leasing of equipment as well as the hire purchase of equipment are common examples of asset finance. As a result of the sort of asset finance you choose, the responsibility for maintaining and repairing the asset, (repairs, insurance, etc.) may be yours or the finance company’s depending on the form you choose.
Equipment leasing involves you hiring business critical assets from a vendor or finance company and then returning it to them at the end of the agreement. You can effectively rent anything from a laptop to a commercial vehicle.
Equipment leasing involves you hiring business critical assets from a vendor or finance company and then returning it to them at the end of the agreement. You can effectively rent anything from a laptop to a commercial vehicle.
Yes, asset finance is a type of loan that is secured by the assets of the business, such as plant, machinery, equipment, etc. A bank loan is exclusively based on how well you are currently doing financially and how much cash you have available. This type of financing is typically either a lease agreement of some kind or a hire purchase agreement, and your lender will also take into account any positive effects that the new purchase is expected to have on the profitability of your business.
o take out a leasing agreement, you usually need to be VAT registered. Fortunately, this works in your favor because, most of the time, you can claim this VAT back.
To get started with your application, click here.
Yes, you are responsible for any damage to the asset while it is in your possession, so you must always have insurance. If you plan to return the asset at the end of the agreement, expect normal wear and tear. However, the lender may require an inspection to assess its condition.
Have Asset Finance Questions?
Please give our friendly team a call on 0800 066 3677 if you’d like more information on how we can help you arrange asset finance for your next purchase.
We’re open Monday – Friday, 9.00-5pm. Or if you’re ready to get started, click the button below.
