Most people have financed a vehicle at some point. In simple terms, that is asset finance. We arrange it for businesses across Scotland, searching over 120 lenders for every requirement.
Asset finance is the industry name for the type of finance used by businesses to purchase vehicles, machinery, equipment and other physical assets. Rather than paying for the asset outright from cash reserves, or waiting until the business has saved enough, asset finance allows the business to acquire the asset immediately and spread the cost over a period of months or years.
The asset itself is the primary security for the finance. This means that, unlike a business loan, no property needs to be offered as collateral. The lender's security sits in the physical item being financed, which keeps the process simpler and faster than property-based lending.
Lenders distinguish broadly between hard assets and soft assets. Hard assets, vehicles, agricultural machinery, engineering plant, forestry equipment, marine vessels, aviation, retain a substantial proportion of their value over time and can be resold if needed. This makes them lower risk for the lender, which is usually reflected in better terms. Soft assets, technology, catering equipment, shop fittings, restaurant furnishings, depreciate more quickly and may have limited resale value, which means lenders are more selective and terms may differ.
Hire purchase is the most common structure for asset finance. The business pays a deposit upfront, typically between 5% and 20% of the asset's value, though some lenders require VAT only as a deposit, and then makes regular monthly payments over a term of three to five years. At the end of the agreement, the business makes a final option-to-purchase payment, at which point ownership of the asset transfers fully.
During the finance period, the asset is technically owned by the finance company. In practice, the business uses it freely and is responsible for its maintenance and insurance. The asset typically appears on the business's balance sheet as an owned asset, with the corresponding liability shown as the outstanding finance balance.
Hire purchase agreements can be structured with balloon payments, a larger final payment that reduces the monthly instalments during the term, or with seasonal payment profiles for businesses with predictable busy and quiet periods, such as agricultural or tourism-related businesses.
A finance lease is structured differently. Rather than paying a deposit, the business makes an initial rental payment followed by regular monthly rentals for the agreed term. At the end of the primary period, the asset remains the property of the lender. However, the business can typically continue using it under a secondary rental period at a much-reduced rate, sometimes described as a peppercorn rental.
Ownership never transfers to the business under a finance lease, which has different accounting and tax treatment compared to hire purchase. Some businesses prefer this structure for specific asset types or for reasons related to how they report assets in their accounts. It is worth discussing with your accountant which structure is most appropriate for your circumstances.
Not all asset finance has to be arranged through a dealer. We regularly arrange finance for assets purchased privately, through online listings, trade contacts, auction or direct from a seller. This is a well-established part of the market, though not every lender offers it, and not every broker knows which ones do.
For private sale finance to work, the seller must be able to provide proof of ownership, this means a finance settlement letter confirming the asset is clear of finance, or proof that it was never financed. A V5 document alone is not sufficient proof of ownership for a lender's purposes. An inspection of the asset is usually required before funds are released, and where the asset is located outside Scotland, the buyer may need to contribute to the cost of an inspector travelling to view it.
We have arranged private sale finance for assets in fields, in yards, on forecourts and in industrial units across Scotland and beyond. If the asset is real, has value, and the ownership chain is clean, there is almost always a route to finance it.
The range of assets we regularly arrange finance for includes:
We finance new and used assets, from main dealers and private sellers. If the asset exists and has value, it is worth a conversation.
A business approaching its own bank for asset finance is, by definition, dealing with one lender and one product range. A business approaching a manufacturer's finance house is dealing with one lender with a specific interest in financing that manufacturer's assets. Neither is wrong, but neither gives access to the full market.
We work with over 120 lenders. Many of those lenders do not deal directly with businesses, they operate exclusively through brokers. A business cannot walk through the door of these lenders, no matter how strong its credit profile. They are only accessible through an authorised broker.
Martin knows which lenders suit which types of asset. He knows which ones take a conservative view of older machinery and which ones are comfortable with it. He knows which ones have appetite for private sales, which ones require inspections, which ones are fast on decisions and which ones are slower but more flexible on terms. That knowledge, built over two decades in the industry, is what we bring to every enquiry.
We receive a commission from the lender on successful completion of an agreement. Nothing is charged to you before that point. The initial consultation is free, and there is no obligation at any stage. If we cannot find a suitable offer, you will not be charged. We disclose the commission model in full before any agreement is signed.