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What is Asset Finance


Asset finance is a form of loan whose main aim is to purchase equipment or upgrade already existing assets. It is mainly used by companies to overcome the challenge of having to raise new capital for purchasing new assets. Asset finance can be used for purchasing cars, plant machinery and office equipment among others. You might be wondering why these companies would not just go for options like hire purchase or finance leases. The reason why most companies prefer asset finance is that it is a secured loan. In other words, the loan is provided under an understanding that the assets purchased with the loan money are put up as collateral for the said loan. The best thing about asset finance is that the loan cannot be recalled while the agreement still stands. For you to understand asset finance, and how it differs from other loans; it is vital that we look at its benefits.

There are a number of asset financing options that you can choose, for example, hire purchase, finance lease, asset refinance, import leasing and vendor finance among others. However, before choosing any one of these options, it is recommended that you look at their benefits and short comings.

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