Asset Finance

Asset Finance

What’s Asset Finance?

Asset Finance is a form of financing that allows companies to acquire or use assets without having to make a significant initial outlay. This type of financing includes options such as Leasing, Renting, Leaseback and Rentback, which are tailored to different business needs.

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What are the advantages or benefits for the company?

Improved cash flow: No need for large upfront investments.
Flexibility: Allows assets to be upgraded or changed according to business needs.
Tax benefits: In some cases, payments may be tax deductible.
Capital preservation : Keeps working capital available for other investments.
Access to up-to-date technology: Facilitates the adoption of modern technology without large upfront costs.
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Relevant facts to know

  1. Leasing: a lease contract whereby the use of the asset is paid for the use of the asset for a specified period of time, with an option to purchase at the end of the contract.
  2. Renting: Similar to leasing, but without a purchase option at the end of the contract; ideal for temporary use of assets.
  3. Leaseback: The company sells an asset and then leases it back, freeing up capital without losing the use of the asset.
  4. Rentback: : Variant of leaseback, especially used in the real estate sector, where a property is sold and then rented out.

FAQ’s

A wide variety of assets can be financed, including vehicles, machinery, IT equipment and property.

Leasing includes a purchase option at the end of the contract, while renting does not.

Depending on the type of contract, it may be treated as an operating expense or an asset on the balance sheet.

Yes, for both small and large companies looking to optimise their cash flow and access assets without large initial outlays.

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