Keeping Your Cash Fluid with Asset Finance

Lease rental and hire purchase are the two dominant forms of asset finance. With latter (hire purchase) you get to own the asset, while with a former (lease) you pay a rent for use. It has been observed that lease has been more popular for ‘technology assets’ like computers, while hire purchase dominates ‘hard assets’ like plant and equipment.

Keeping this in mind, you need to assess which asset finance is best for you. Apart from the two asset finance, there are two forms of delivery - direct and vendor.

Direct asset finance is when finance is arranged independently of the asset supplier. Banks, specialist financiers and a wide range of brokers offer direct hire purchase and lease agreements.

Vendor finance is offered as an alternative to ‘cash sale’ by the supplier. There are circumstances and asset types particularly suited to this type of finance. The vendor finance module highlights these circumstances by assessing the relative features of the direct and vendor approach. It does not, however, assess the relative costs and a quote for direct finance is a useful benchmark for assessing the cost/benefits of the vendor approach.