How much does it cost?
The main fees associated with asset finance are the arrangement fee and the interest rate. The arrangement fee is usually a percentage like 5% of the loan amount. One thing to note with asset finance is that interest rates are often presented in two ways: as a flat rate or APR. With a flat rate the interest is charged on the original amount borrowed, no matter what’s been repaid, so throughout the loan you still pay interest on the original amount; whereas APR is paid on the reducing balance. Flat rates are presented as a lower number e.g. 5% flat rate versus 10% APR, however you will end up paying more in interest.
The good thing about asset based lending which includes other solutions like invoice factoring, invoice discounting, property finance, commercial mortgages and asset finance is that it attracts competitive interest rates because the loan is secured against a tangible asset. Rates vary greatly and depend on your circumstances.
- Hire purchase, operating leases, finance leases and asset finance solutions
- Terms up to 7 years
- Finance available for hard and soft assets
- Flexible interest options
- Potential tax benefits
- Competitive interest rates