Asset Finance
Asset Finance provides a company with the ability to purchase assets to grow their company or improve production or replace existing assets without having to utilise their own funds to do so. It can also release cash out of the equity of existing assets of high value
including vehicles, plant/machinery & equipment and the repayments are spread over an agreed term.
A few options of Asset finance available here at Athena Finance Solutions are as follows:
Hire Purchase
Finance is provided where it is secured against the asset with repayment terms typically vary from 12 -84 months dependant on the asset. Hire Purchase shows both the asset and the finance on the company’s balance sheet and the Vat can either be paid up front or deferred with a VAT deferral loan for up to 4 months until the VAT is received back from HMRC which the borrower then pays back to the lender.
Balloon and bullet payments can be used to pay a larger payment at the end of the term of the facility but reduce the monthly repayments.
Finance Lease
Like Hire Purchase, Finance Lease also provides finance secured against the asset with repayment terms typically vary from 12 -84 months dependant on the asset and appears on the balance sheet, however the Lender is typically the legal owner of the asset for the term of the lease. The borrower operates and maintains the asset and owns a share of the equipment. The benefit of a finance lease is the ability to spread the Vat over the term of the agreement, however at the end of the agreement a proportion of the residual value of the asset must be paid to transfer ownership.
Refinance / Equity Release
The two main ways to release the equity out of your existing assets are either Sale and HP back or Sale and lease back. If there is finance still outstanding on the asset (s) this would be repaid by the funder as part of the transaction. Borrowers can release extra funds or re-adjust their existing facilities to provide more manageable or attractive terms. A percentage of the current asset value is released to the borrower and spread over a negotiated term as a HP or Lease agreement.