How to use asset finance to grow your business
2 min read
16th May 2024
Discover the power of asset finance in business growth! Learn how to acquire essential equipment without upfront costs.
Your business has identified a piece of plant, equipment or machinery that could help you make more sales. But there’s just one problem – you don’t have the cash to buy it.
The good news is, you can acquire that valuable asset without putting down lots of cash and without buying it.
That’s where asset finance comes in.
With asset finance, your business can lease the asset in return for a regular monthly payment.
The advantages of asset finance
Asset finance offers five big benefits:
- Lower barrier to entry – using asset finance requires less money up front than putting down a deposit for a business loan or buying the item outright
- No security problems – the finance arrangement is secured by the asset, which means you don’t need to offer property as collateral
- Looser eligibility requirements – asset finance is faster and easier to attain than a business loan, because less paperwork is required
- Easier to keep up with technology – when the lease term ends, you can begin a new lease with a more modern version of the same asset
- Predictable payments – monthly repayments are fixed, which makes budgeting easy
How asset finance works
Here’s a hypothetical example of how asset finance can work:
- A bottling plant needs a new production line to fulfil a new, five-year supermarket contract
- But the business has no spare capacity
- And it can’t afford to buy a new production line
- Rather than surrender the contract, the bottling plant acquires the production line through a five-year asset finance arrangement
- The profits generated by the supermarket contract significantly exceed the finance costs
- At the end of the five years, if the bottling plant wins a contract renewal, it can start a new finance arrangement with a more modern production line
- If it doesn’t win a renewal, it won’t be stuck with a useless, depreciating piece of equipment
Want to use asset finance to grow your business? The team at Vie can give you the expert guidance you need. To discuss your options, call 1300 400 843 or submit an enquiry below!