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Asset Finance

Author: Harry Jones And Facted Checked by : Shanie Capper
Last updated on : 21 August 2023

Understanding Asset Finance

Asset finance is a financial tool that allows businesses to access the equipment, vehicles, or machinery they need to grow and operate effectively without the need for outright purchase. It involves using a company’s balance sheet assets, including short-term investments, inventory, and accounts receivable, to borrow money or to make a loan.

The Mechanics of Asset Finance

The underlying principle of asset finance is fairly straightforward. A business in need of a particular asset but lacking immediate funds or preferring to spread the cost can obtain the necessary item through a finance lease, hire purchase, or similar arrangement.

In such cases, the company financing the asset will buy the equipment, vehicle, or other item on behalf of the business. The business will then pay for the asset over time, generally through monthly installments. This approach offers several key advantages, including improved cash flow management and the ability to secure the latest or high-value assets that may have been unaffordable upfront.

Key Types of Asset Finance

There are different types of asset finance options available, designed to suit different business needs. These can include:

  • Lease Financing: Where the financing company retains ownership of the asset, but the business can use it for a fixed period in return for regular payments.
  • Hire Purchase: Similar to lease financing, but with the option for the business to purchase and own the asset at the end of the term.
  • Asset Refinancing: A loan secured on an asset that the business already owns.

With these options, businesses can secure the equipment they need without tying up capital or relying heavily on traditional lines of credit.

When it comes to planning for growth or managing business expenses, asset finance can provide an efficient and effective solution. However, as with all financial products, it is crucial for businesses to fully understand the agreement and the potential costs involved before committing.

Assets Finance in the UK

Providers of Asset Finance in the UK

Several reputable institutions in the UK specialize in offering asset finance solutions. Below are a few notable examples:

  1. Lombard: Lombard is one of the UK’s top asset finance providers, offering a range of solutions such as hire purchase, leasing and asset-based lending. They work with businesses of all sizes across various sectors.
  2. Close Brothers Asset Finance: This company offers flexible funding solutions to a broad spectrum of industries, providing hire purchase, leasing and refinancing options.
  3. Hitachi Capital UK: Hitachi Capital provides flexible asset finance solutions, including hire purchase, lease purchase, and operating lease options.
  4. Aldermore Bank: Aldermore Bank offers a comprehensive suite of asset finance options, helping businesses to release tied-up funds, refinance assets or invest in new equipment.
  5. Barclays Asset Finance: Barclays provides various asset finance solutions, such as hire purchase, lease purchase, finance lease and operating lease, across a range of sectors.

Frequently Asked Questions About Asset Finance

What is Asset Finance?

Asset finance is a type of lending that enables businesses to obtain assets such as equipment, vehicles, or machinery without having to pay the full cost upfront. This type of finance often involves regular payments over an agreed term.

What Are The Types of Asset Finance?

There are several types of asset finance, including hire purchase, finance lease, operating lease, and lease purchase. Each has different terms and may be suited to different types of assets and business needs.

Who Can Apply for Asset Finance?

Businesses of all sizes, from small start-ups to large corporations, can apply for asset finance. The main requirement is that the finance is used to obtain an asset that will be used in the business.

Can You Get Asset Finance with Bad Credit?

While having a good credit history can make it easier to obtain asset finance, some lenders do consider applications from businesses with bad credit. However, you may face higher interest rates or need to provide additional security.

What Are the Benefits of Asset Finance?

Asset finance can help businesses manage cash flow since it requires less upfront capital than outright purchases. It can also allow businesses to obtain and use assets that they might not be able to afford otherwise. In addition, some types of asset finance may offer tax benefits.

What Happens at the End of an Asset Finance Agreement?

The outcome at the end of an asset finance agreement depends on the type of finance. For example, with a hire purchase agreement, ownership of the asset typically transfers to the business after the final payment. For a finance lease, the business may have the option to continue leasing, return the asset, or sell it to a third party.

Remember, it’s always essential to read and understand the terms and conditions of any finance agreement before entering into it. If you have more specific questions, consider seeking advice from a financial advisor or directly from the finance provider.

My Quick Loan and Asset Finance

When considering asset finance, it’s crucial to note that My Quick Loan does not offer this specific type of finance. Our specialty lies in providing UK fast loans to individuals who need immediate financial assistance, with loans available up to £5000.

Although we do not offer asset finance, we understand the importance of such financing options for businesses. Therefore, we strive to offer comprehensive and useful information about various types of loans, including asset finance.

If you find yourself in a situation where you need quick access to funds, perhaps for immediate business expenses, or if an unexpected cost arises, a loan the same day from My Quick Loan could be an option to consider. Our quick loans could offer you a solution that allows you to manage these expenses without causing significant disruption to your cash flow.

However, it’s important to remember that our quick loans may have a higher APR compared to traditional lenders, so they may not be suitable for large-scale investments like those usually funded through asset finance. Always take the time to consider your options and ensure that the financial solution you choose aligns with your financial circumstances and needs.

For more information about our services or if you have any queries, we encourage you to explore our website or get in touch with us directly. We’re committed to helping individuals understand their financial options and make informed decisions that suit their needs.



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