Asset Finance for the Purchase of a Vehicle

The purchase of a car, van, or truck can take your business to the next level, but what happens if you don’t have enough readily available cash to pursue this opportunity? Asset finance could be the solution. set finance could b

 

37Vehicle finance and its benefits 

Asset finance allows your business to gain access to resources – ranging from technology to equipment – required for growth, all without compromising your cash flow. 

The addition of a vehicle can make all the difference for various business types. A new truck can allow a removals company to take on more work. A van can open the door for a takeaway to offer home deliveries. A fleet of cars can give sales reps the chance to travel far and wide.

Vehicle finance provides a company with immediate access to the funds needed for their transport of choice. The result: they acquire the vehicle needed to grow their business, all without having to save up for the purchase.


How does vehicle finance work? 

This finance type supplies the cash needed to immediately buy – and ultimately own – your vehicle of choice. This purchase acts as security against the loan, which means a company is more likely to receive this funding than, say, a standard business loan.

Another positive of vehicle finance is that it’s paid back over time, over an agreed timescale that suits you. This makes it easier to budget for a new vehicle purchase, particularly when compared to paying outright where a large sum of money is necessary. Even if you gain a standard loan for this outright purchase, the monthly repayments will typically be much higher.

 

What are the costs involved with vehicle finance? 

When it comes to asset finance for a vehicle, the cost you pay is determined by a number of factors. 

The two main aspects are:

  • The amount of money borrowed
  • The term length

 

The more money borrowed and the longer the term, the more interest you will ultimately pay. The interest rate decided by your lender is also affected by your credit score and credit history.  

Along with the regular loan payments and the interest imposed, there could also be additional fees to consider. These can include early repayment fees and set-up fees. To know about any potential extra fees, ensure you check with your chosen lender for specifics.  

 

How long would it take to secure? 

Again, this is dependent on various elements. Asset finance can be secured in a matter of hours, for instance, but this may only be possible if your business is established, you possess a strong credit history, your finances are in order, and all required documentation is organised. 

If you decide to go the traditional route with a bank loan, the application and approval process is not one built for speed. 
However, when you seek out using a personal broker like TSF Finance, the difference could be waiting hours with a personal broker or weeks with a traditional bank.
 

The lease type and vehicle type can also have an impact on your waiting time. Say the vehicle you select isn’t in stock. This means it will need to be ordered. You could be waiting up to 14 days or longer for the vehicle to arrive and for the deal to be finalised.  

 

What type of security do I need? 

For asset finance, the borrowing is secured against the vehicle you’re financing. This gives lenders the reassurance that, should you fail to meet payments, they can seize the vehicle and not be at risk of losing out.

Due to the nature of this financing, it typically requires an upfront deposit along with your agreed monthly repayments. If payments are missed, you might be able to negotiate a window of leniency with your chosen lender.

 

Whether you’re acquiring a car or a piece of equipment, asset finance can be a great resource for a business attempting to climb to the next level. Yet it’s important you receive assistance from the right asset finance broker.

That’s where TSF can help. We’re an award-winning business that possesses many years of experience in the financial sector. Add in unparalleled customer service and the desire to go above and beyond for your financing needs, and there’s no better option when it comes to asset finance. Book a meeting today.

 

asset finance

 Invoice Finance for Travel and Haulage Companies An Interview with Nick Stern, Senior Funding Partner at TSF Finance 

Subscribe to blog