A cash raising exercise designed to put cash back into the business.

In the UK there are an extensive range of innovative asset based finance solutions that enable you to unlock the value of existing assets by refinancing.

There are four major types of asset finance:

Leasing:

You effectively have all the benefits of the asset without acquiring the legal title and its depreciating value. The lease is calculated so that the value of the asset is paid in full over an agreed term, at the end of that term the asset can be sold to a 3rd party where you can receive a share of the sale proceeds (if the lease is not being extended). In most cases you will not acquire full ownership of the asset. However you usually have the option of extending the lease period, and as you would have paid the full value of the asset the rental payments will be minimal – which is often referred to as ‘peppercorn rental’.

Operating Lease:

Often a shorter time frame regarding the leasing agreement compared to financial leasing, with the contract period being less than the working life of the asset and more like a regular rental agreement. The contract period is less than the working life of the asset as the lessor would expect to either sell the asset in the second hand market or lease it again and therefore not need to recover its total value.

There may be an option to extend the leasing period at the end of the agreed term, as with finance leasing you will not acquire full ownership of the asset or share in the sale proceeds.

Contract Hire:

A form of operating lease (often used with cars and other vehicles) that includes a number of additional services such as maintenance, management or replacement if asset is in repair.

Hire Purchase:

This is an agreement for the hiring of an asset with an option to purchase. The legal title will pass to you when all payments have been made. The term of a hire purchase must be significantly shorter than the working life of the asset. You are able to claim capital allowances as if you had purchased the asset outright, gaining immediate use of it.

Asset finance can be used to release funding in many assets, including:

• Printers.
• Machinery.
• Cars.
• Commercial Vehicles and Trailers
• Contractors Plant equipment
• Stock
• Technology
• IT Hardware
• IT Software
• Any other type of business asset