Today, businesses have many commercial finance options. But, as they say, with choices comes the hard part of making the big decision. This is where asset finance comes into the picture. It is one of the easiest available and flexible forms of finance that caters to different industry types and businesses. Asset finance is one type of business finance.
This type of finance happens when you and a leasing company enter into a lease agreement to hire a piece of equipment rather than making the purchasing decision. Here, you hire the equipment and pay a part payment, usually consented to by both parties, every month for a specified period, ranging between one and five years.
When Asset Finance Becomes a Viable Option?
There are times when, as a business, you need capital to fund your buys and explore expansion opportunities or pay to suppliers. This is where this type of finance becomes a viable option. Here are other prominent reasons:
- If you are an SME struggling to meet your business’s rising costs, asset finance can help you divide purchases into reasonable amounts.
- If you want the leaders to make swift decisions about delivering machinery, equipment, and vehicles.
- If you are looking for flexible payment options for the leased equipment, you can opt for asset finance. This enables you to pay as you go – the lease on short-term, long-term, or extended terms, as discussed during the contract signing.
Since you are now familiar with the situations where asset finance can be the right call, it is time to ascertain the benefits of this type of business finance.
Benefits of Availing of Asset Finance for Your Business
Here are some pointers to illuminate the advantages of using this type of finance for your business.
Saves Enough Cash
When you choose an asset or rental lease, you pay only for the time you use the asset. There is no upfront premium that you could have spent purchasing a piece of new machinery, enabling you to get prompt returns.
Allows for Better Control over Your Finances
Commercial asset finance enables you to control your monthly expenses better. This way, you can effectively monitor the costs you incur for the business.
Inbuilt Risk Management
In the tech world, where instant upgrades are involved, asset leasing eliminates the risk of using obsolete technology.
Enables You to Make Swift Decisions
You can make swifter decisions about this type of business finance by opting for equipment that suits your business without lag time. Also, assets come with security, which makes it easier for you to accept them promptly.
Saves Tax
This type of finance can help with your tax bill. Since lease payments are categorised as expenses, they can easily be deducted from your profits.
Saves You Enough Working Capital for Business Operations
You can save all the cash reserves, which can be used for working capital and other expansion opportunities, as the equipment is not paid in a lump sum.
Saves You from Taking Greater Risks
If you are worried about making stable profits from your business, you always have a financial obligation at the back of your mind. However, when you use this type of finance, the worst that can happen is that the asset can be seized without putting other properties at risk.
Opt for an Experienced Mortgage Broker for All Your Asset Finance and Business Finance Needs
If you wish to purchase equipment to keep your business updated according to technology development or need working capital to run your business smoothly, choose Real Lending Solutions, a reputed mortgage broking company providing asset finance and business finance services in the Illawarra area and beyond. Contact us today, and we will help you choose the ideal finance option for your business.
