Businesses going through periods of growth may need new equipment or vehicles to support this. Understanding the three most popular asset finance options will help you choose the right one for your business if you need funding.
Asset financing typically involves fixed monthly repayments for the term of a loan in return for use and potential ownership (finance option dependent) of an asset. Asset finance may help you:
The most popular asset finance options are an equipment loan, hire purchase and finance lease. Make sure you understand the features and conditions of each to work out which could best suit you and your business.
Also known as a chattel mortgage, an equipment loan may suit businesses that want to own a car or equipment as soon as possible.
How does it work?
Hire purchase may be a good option if you want immediate use of a car or equipment while paying it off over a fixed term.
How does it work?
A finance lease can suit business owners who want to use a car or equipment without owning it. It can particularly suit business owners who need to keep their assets up to date, for example medical practices that need cutting-edge technology.
How does it work?
For both an equipment loan and hire purchase, you may also want to consider:
If you need help to figure out what type of business lending and level of funding you need, talk with your accountant or get in touch with us and talk to someone from our specialist team. An ASB Business Banking Specialist can explain each option in more detail and help you understand which may best suit your needs.
Our specialist teams are here to support you on your business journey.
Every business is different and has unique banking needs, discover your options.
This page is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and should not be relied on. This information has been prepared without considering your objectives, financial situation or needs. We recommend you seek independent professional advice and contact Inland Revenue before acting on this information.
