Asset financing

Whilst smartfundit.com's over-riding expertise lies within the technology finance arena, our growing network of world-class finance providers can help you or your customers - fund many different types of assets, including plant, machinery, and industrial equipment.

The benefits of asset and equipment finance

Keep your business competitive by investing in the latest plant or equipment, removing the risk of reduced productivity or obsolescence

• Invest in assets you need now, but spread the cost over terms that suit your business
• By avoiding paying for your assets in up-front payments, preserve your working capital and see a rapid Return on Investment
• Choose the finance product and payment plan which best suits your budget and cash flow forecasts.

What's best for you?

All types of asset financing offer different advantages and it is important that you assess your circumstances and needs before committing to a specific finance contract.

Finance vs cash … the pros

Better cash flow

Asset leasing gives you access to the asset with minimal up-front payments and spreads the cost over time. You pay for the asset with the income it generates while minimising the drain on your working capital, and you don't have to pay tax for the entire purchase up-front, you simply pay when you make the repayment and then claim back in the same period.

Maximise financial leverage

Your lease can often finance everything related to the purchase and installation of the asset and may free up cash flow to pay for items such as training.

Simplified cash flow management

Lease payments are usually flat, making cash management more predictable and easier than with a variable rate loan. The fixed interest rate of a lease also helps if interest rates rise.

Flexible finance periods

Leasing contracts can be structured to fit your requirements. Use an asset as long as you need it and pay for it out of the cash flow it generates.

… the cons

More expensive

A finance lease is usually more expensive than an outright cash purchase as the payments include finance charges. However, leasing may cost less than other forms of financing. Also consider the tax advantages when making this calculation.

Additional guarantees

Depending on the credit rating of your business, the finance provider may require additional guarantees. These may be provided by the directors of the company or in the form of guarantees from other associated companies.

Fixed interest rates

Interest rates are usually fixed throughout the lease which may prove a disadvantage in times of falling interest rates, but this can also be a significant advantage in a turbulent economic climate
Other details to consider

Return of asset conditions

If you choose to return the asset at the end of your lease, consider exactly what you have to return, to where and the condition it must be in.

Notice period

If your lease includes the option to renew, make sure you know when to give notice in case you do not want to continue the contract. Some leasing companies will automatically renew if you fail to give notice.

Purchase rights

If negotiating the right to purchase the asset at the end of your lease, a predetermined fixed price offers more value as the 'fair market value', which theoretically is always available to you.

Maintenance responsibility

Clarify which service and maintenance programmes are included in the lease. If you are responsible for service and maintenance, make sure you do not have to provide it to an unreasonably high level.