The Different Types of Asset Financing Explained: Find the Perfect Fit for Your Business

Need that new piece of equipment but worried about a large upfront cost? Asset finance can be the key to unlocking your business’s potential. With flexible finance options available, finding the right solution for your business, is not as difficult as it seems. At Shire Asset Finance, we’re here to help! Let’s break down the most common types of asset financing and explore which might be the best fit for your needs.

Hire Purchase: This option is similar to a loan for an asset. You spread the cost over fixed monthly payments, and once all payments are made, you own the equipment outright. It’s a good choice if you want ownership and can budget for predictable repayments. Most funders will allow VAT only deposit, dependent on financial status.

Lease: With a lease, you essentially rent the equipment for a set term. You make fixed monthly payments, but ownership remains with the lender. This can be beneficial if you need the equipment for a specific period or want to upgrade to newer models before the finance term ends.

* **Finance Lease:** Similar to hire purchase, but the treatment of VAT is different, where it is paid monthly.

Asset Refinance: Do you already own valuable equipment? Asset refinance allows you to unlock its equity by using it as collateral to free up cash flow for other business needs while keeping the equipment you rely on and is traditionally a cheaper option to a loan.

Choosing the Right Option:

The best type of asset financing depends on your specific needs and goals. Here are some key factors to consider:

  • Budget: Consider your cash flow and how comfortable you are with fixed monthly payments.
  • Ownership Needs: Do you want to own the equipment at the end of the financing period?
  • Equipment Usage: How long will you need the equipment? Shorter terms might favour operating leases, while longer use cases could benefit from hire purchase or finance leases.
  • Tax Implications: Consult with your accountant to understand the tax implications of each option. Also, there are very aggressive tax rebates from HMRC regarding certain types of assets purchases.

Shire Asset Finance: Your Partner in Growth

At Shire Asset Finance, we offer a wide range of asset financing solutions to fit your business needs. Our experienced team can help you navigate your options and choose the perfect financing solution to fuel your business growth.


Contact us today, and we will gladly assist you in making the right funding choice for your business.

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