Successfully Funding Thousands Of UK Limited Companies Since 1989
Require Immediate Support? Helpline 0800 056 0410
Equipment finance and refinance help businesses purchase new equipment or unlock the value of existing equipment assets. They are forms of asset funding that can help companies grow.
Equipment financing and refinancing spread the cost of expensive assets and allow businesses to benefit from their full usage whilst retaining capital and safeguarding cash flow.
Equipment finance can be a good option for businesses seeking to increase their asset holding and may be used for new and pre-owned equipment. Various types of equipment funding exist, including equipment leases and hire purchase contracts.
Equipment leases
An equipment lease requires the borrowing business to make monthly instalments to the financier, typically at a fixed interest rate. This is a good option for businesses that do not want to own the equipment at the end of the lease contract.
There is typically a range of options available at the end of the agreement. The lender may allow the borrower to upgrade the equipment, extend the lease agreement, or hand the asset back if it is no longer needed.
A key element of an equipment lease is that ownership cannot transfer to the borrower, unlike an equipment hire purchase agreement.
Equipment hire purchase
Financing equipment through hire purchase enables a company to take ownership of the asset at the end of the contract. The borrowing business pays an initial deposit, which is generally around 10 per cent of the value of the equipment.
Monthly repayments follow and are fixed for the duration of the agreement - typically up to six years. A final ‘completion’ fee is then charged if the business opts to take ownership of the asset.
If a business already owns expensive equipment it can sell it to a financier and rent it back whilst retaining full, uninterrupted usage rights. This is called equipment refinancing and it provides a large cash injection for a business.
Equipment refinancing is also beneficial for cash flow - the business repays the financing company via fixed instalments over a pre-agreed period, after which time they become owners of the asset again.
Spreads the cost of expensive equipment
Healthy cash flow is maintained as businesses can avoid a large outlay of capital, and repay in affordable amounts over an extended period.
Flexibility of finance options
Equipment finance products offer a range of options to borrowers, including full ownership, an extension of a finance lease, or an upgrade of the piece of equipment.
Tax advantages
The repayments on a finance lease are tax deductible. If hire purchase is chosen, the business may be able to claim capital allowances on ownership of the asset at the end of the agreement.
Unlock the value in existing equipment
By refinancing an existing piece of equipment a company can release working capital tied up in the asset and use it for other projects or business areas.
We can help you secure the most appropriate type of equipment finance for your business. Our team will search the whole of the market to find the best quotes, and there are no fees to pay for our services.
UK Business Finance are commercial finance brokers, rather than lenders, so please get in touch to find the best equipment finance and refinancing deals for your business.
Further Reading
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
What can company finance be used for?
Business finance can be used for a multitude of purposes within a company, from boosting general cash flow to funding development projects and buying stock. Its flexibility and adaptability to an individual business’s needs make it ideal whatever stage of business you’re at.
Management buy-in financing options
If you’re considering being part of a management buy-in (MBI) or you’ve decided to sell your own business to an incoming management team, there are several ways in which the transaction can be financed.
Can I get business finance if my company is insolvent?
If your company is insolvent, it’s vital to stop trading straight away and obtain assistance from a licensed insolvency practitioner. The insolvency practitioner’s role at this point is to assess your company’s financial situation so that they can provide guidance on whether additional finance is appropriate.
Can’t pay company bridging loan – what are my options?
A bridging loan is a form of short-term finance that lasts for up to 12 months. It provides vital funding between transactions when a company purchases one property before the sale of another has been completed.