Could asset finance save you money

In the market for a new piece of equipment or vehicle? Did you know you could save up to 50% with asset finance?

Last year, almost all of our customers got a cheaper deal with asset finance compared to a term loan. Here we look at how it works and why we are able to offer cheaper asset finance deals to most businesses. Plus, with asset finance you could take advantage of tax breaks, which we also cover below.

How does asset finance work?

Asset finance does what it says on the tin. It's finance that is provided for a specific business asset. So if you're looking to fund a new or used asset, such as equipment, commercial vehicles or machinery, asset finance could be the right choice for you. You can also use asset finance to raise finance against an existing asset.

The asset purchased is used as security against the loan. This means if you fail to meet your repayments, the lender can sell the asset to recover funds. As such, asset finance customers carry less risk to the lender than term loan customers.

What can I buy with asset finance?

We work with a panel of partners that can fund a wide range of business assets, with finance to suit different needs. Some of the most popular assets include:

• Cars, vans, HGVs & motorcycles
• Tractors and farming vehicles
• Plant and machinery
• Green energy equipment
• Manufacturing & construction equipment
• Agricultural and forestry equipment

Why is asset finance often cheaper than a term loan?

When a finance deal carries a lower risk to lenders, they are able to offer more favourable terms, not only on price, but with flexibility as well. Asset finance deals can be tailored to best suits your business needs, with options including:

Lower interest rates - At Funding Circle, 98 per cent of businesses who received an offer for both asset finance and a term loan were given a lower rate with asset finance - a difference of 12 per cent, on average.

Flexible repayment options - You can choose whether to spread the cost over a fixed term, the life expectancy of your asset, or another term that matches your needs. Some lenders offer seasonal payments so you can pay back more when your cash flow is strongest, or there are options to pay back early - all further ways asset finance could save you money.

Low or no deposit - If you don't have cash to put down upfront, some deals don't require a deposit, so you can get your asset sooner and use the extra revenue it generates to pay off the loan.

To find out what other options are available with an asset finance deal, read 7 benefits of asset finance that could help your business.

What about tax breaks?

Thanks to capital allowance tax breaks, you could deduct the full cost of qualifying vehicles, machinery and equipment from your taxable profits, saving you up to 25% on the cost of your new asset.

Electric and emission-free vehicles are also eligible for 100% tax relief.

You could also benefit from VAT deferrals, or pay the VAT amount as your deposit to claim back later. Speak to a financial advisor or tax expert to see what you could qualify for.

How much does asset finance cost?

If you want to explore the options of asset finance, you can see how affordable your asset finance loan could be with our quick online calculator.

Alternatively, complete our simple online form and an Account Manager will contact you to review your options, find the right deals and put you in the best position to get approved.

At Funding Circle we'll always look to get you the right product for your business. When you apply for asset finance through Funding Circle we can assess you for a business loan at the same time. If we believe one of our other products would be a better fit for you, we'll let you know.

08/01/25: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.

Public link

Please use the above public link if you want to share this noodl on another website.