what is asset finance?

what is asset finance?

Asset Finance, also known as Equipment Finance (EF), is a type of business loan used for acquiring new or used equipment and assets that are needed for growth. This funding solution allows companies to split the full cost of the asset into monthly payments over an agreed period of time. Therefore, this funding option can assist your cashflow while the asset derives an income for the business.

what are the types of asset finance?

There are numerous types of asset finance in the market. However, the two most common are Rental Agreement and Chattel Mortgage

Rental Agreement – A lender buys the equipment directly from a customer-selected supplier and “rents” the equipment to the customer for a fixed term.

Chattel Mortgage – Popular amongst business owners and operators, this equipment loan works for businesses that want ownership of an asset and have it listed on the balance sheet from day one. Moreover, repayments can be set at the same amount each month.

what are the benefits of using asset finance solutions?

Other than the fact that it’s easier to obtain than traditional bank loans, asset financing’s biggest benefit is its ability to improve cashflow by eliminating unexpected costs through flexible payments of the total amount of the equipment. Instead of paying a lump sum for equipment, you can divide the cost into affordable monthly instalments with various terms ranging from 12 months up to 60 months.

Equipment loans also allow you to stay on top of business opportunities by providing access to the needed asset without having to utilise your working capital. Accordingly, you will be able to receive funds of up to 100% of the cost of the equipment, which will significantly reduce financial pressure.

In most cases, the immediate returns from the newly acquired equipment will help cover the monthly payments for the loan. Asset Finance covers the total cost of the goods (usually with no upfront deposit), with the asset itself serving as collateral.

who provides equipment loans?

Similar to private car loans, most banks offer funding solutions for business equipment. However, businesses can fare better with the help of Asset Finance non-bank lenders like thornmoney and brokers. This is because non-bank lenders and brokers who specialise in asset finance are more flexible, will take time to understand your business needs, accept a wide range of industries, and have knowledge of the market and asset finance options

thornmoney’s asset finance suite

What makes thornmoney distinctive is our cutting-edge platform where an application can be completed in 15 minutes followed by a swift approval process. Besides, we strive to support businesses of all shapes and sizes across Australia. We are committed to making sure everyone is given a fair chance. Thus, most assets that your business needs can be covered with exception of certain industries and asset types outside our risk appetite.

Thornmoney offers flexible loan terms with loan amounts ranging from $10,000 to $1,000,000 for a period of 12 to 60 months. And though lenders are usually cautious when it comes to leasing to new businesses due to the higher risk involved, we can offer start-ups funds of up to $100,000. We believe no business is too small to be considered. As long as your company’s director has at least 2 years of relevant industry experience, asset-backed, clear credit history, registered for GST and willing to put in a deposit, you can receive business funding from thornmoney.

For more information on thornmoney’s business asset finance, click the learn more button below.