How asset finance can help you to grow your business

If you’re looking to expand your business, it’s important to ensure that you have adequate resources in place to allow for growth. Perhaps you could do with a company car or a commercial vehicle, or maybe you need new machinery or equipment, or even commercial property – whatever you need, making sure you’ve got the right assets in place will help your business to adapt to the market and maximise your revenue.

The great thing about asset finance is that it allows you to invest in your business without tying up existing capital. It gives you the flexibility to purchase the equipment you need for your business, when you need it, with affordable repayments made over an agreed term to suit your cash flow.

It’s essential to equip your business with all the revenue generating assets it needs to make the most out of current market opportunities – purchasing assets outright often isn’t the best use of your capital, and putting off purchases while you wait for sufficient cash flow can dramatically impact your bottom line.

There are all sorts of asset finance options available to suit the individual needs of your business – whether you are looking to own the asset at the end of the agreed term, or whether you would like to lease it for a fixed term, with the view to replacing it. There’s a range of installment options too, and you can choose to spread payments evenly over a fixed monthly repayment plan, or you can make flexible repayments to tie in with your strongest sales period – you can even make quarterly or biannual installments. It may even be in your benefit to release the capital tied up in the assets you already own by taking out a refinance option.

It’s also worth bearing in mind that, if you are a UK business that pays corporation tax, you may be able to claim capital allowances when you buy assets that you keep to use in your business. If you are entitled to capital allowances, you can deduct some or all of the value of the item from your profits before you pay tax. This applies to machinery and equipment, as well as many vehicles including vans and lorries, and depending on the type of business you operate, even cars.

If you buy an asset outright, you can only account for depreciation and interest rates, which is often less than lease payments – this means that asset finance could lead to a lower tax bill at the end of the year. For an immediate cash flow boost, you can also reclaim VAT as it applies to the repayments, not the purchase price.

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