As most assets depreciate over time, accountants argue that it makes sound financial sense for businesses to pay for these assets over their useful life. Capital can then be used to develop the business rather than paying in advance for expensive cars or machinery. Asset finance solutions have the benefit of enabling the monthly cost of the asset to be allocated to the area of the business that is benefitting from its use, and leads to effective measurement of finance used by individual business units.

How Asset Finance Solutions work

Finance lease: This is where you rent the asset from the leasing company for the duration of the agreement. This is highly tax efficient as the total payment is tax deductible. The asset can normally be bought from the lessor at the end of the lease.

Lease purchase/Hire purchase: These forms of asset finance solutions means that the asset is owned by you at the end of the agreement. Monthly payments are made up of capital and interest. Whilst it is only the interest component that is tax deductible, Capital Allowances can be claimed in most cases.

Trans Capital Insider tips

  • It is of vital importance that all charges and terms of the underlying agreement are taken into consideration when evaluating asset finance options.
  • Ongoing service is less of an issue with asset finance than with say, invoice finance or trade finance.

How Trans Capital can help

We can facilitate asset finance facilities from £25,000 to £25,000,000. These can be either on a stand-alone basis or as part of a wider asset based lending facility incorporating other business assets.