What is Asset Finance, why use Asset Finance and how to find Asset Finance?

Updated: Dec 3, 2019

Asset finance comprises of both leasing and hire purchase. Asset finance gives firms access to equipment their business needs to grow which otherwise may not be accessible due to cash flow restrictions.

Firms have immediate use of the asset however are required to pay a monthly fee over an agreed period of time and so avoid the upfront costs.

Brand new installed using Gym finance


The leasing company, known as the lessor buys and owns the asset on behalf of the customer known as the lessee. The customer pays a rental for the use of the equipment over a predetermined period.

There are two main types of lease:

A Finance Lease: All rights and obligations of ownership such as maintenance and insurance are transferred to the lessee, over the agreement period the lessee will have paid back the majority cost of the asset.

An Operating Lease is used when a business does not require the asset for the entirety of its working life and the lessor will take it back at the end of the agreement period and is responsible for maintenance.

Hire Purchase

Two employees reviewing SME asset finance with macbooks pencil and paper.

Hire Purchase, commonly abbreviated to HP, allows a company to buy the asset on credit.

The finance company purchases and owns the asset until the final payment is made. The business then makes regular payments over an agreed period until the asset has been paid off, the business is then given an option to buy the asset for a marginal sum.

Why use asset finance?
Business papers on why use asset finance