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Asset Finance · Rates & Costs

The Asset Finance 100.
Rates & Costs

Focus: Fees, interest rates, and the total cost of borrowing.

19+Questions
100%Expert Answers
FCARegulated
What does a residual value mean in asset finance?
TL;DR Residual value is the estimated future worth of an asset at the end of a finance term. Learn how it impacts monthly payments, Balloon Payments, and different types of UK asset finance agreements like Hire Purchase and Leasing.
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What happens at the end of a finance lease agreement?
TL;DR Understand the options when a finance lease ends, including secondary periods, selling the asset, or returning it. Learn about the typical final payment and HMRC implications.
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Can I purchase the asset at the end of an operating lease?
TL;DR Operating leases often restrict purchasing the asset due to UK accounting rules (FRS 102/IFRS 16). Learn the rules, the risks of implied ownership, and potential solutions.
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Is asset finance regulated?
TL;DR Asset finance regulation in the UK depends on the customer type (consumer or business) and the product. Learn about the FCA, the Consumer Credit Act (CCA), and the regulatory perimeter for leases and hire purchase agreements.
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Can startups use asset finance?
TL;DR Startups often struggle to secure traditional loans, but asset finance offers a viable route. Learn how leasing, hire purchase, and refinancing work for new UK businesses.
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Can I use asset finance for technology purchases?
TL;DR Asset finance is an excellent way for UK businesses to fund new technology, including hardware, software, and IT infrastructure. Explore hire purchase and leasing benefits, and understand the application process.
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What is the credit check process for asset finance?
TL;DR Understanding the credit check process for asset finance is crucial. Learn how lenders assess your application, the difference between soft and hard searches, and what factors influence approval in the UK.
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What is the difference between hire purchase and finance leasing?
TL;DR Understand the core distinctions between Hire Purchase (HP) and Finance Leasing (FL). HP offers ownership at the end, while FL is a long-term rental contract. Learn about the financial and legal implications for UK businesses.
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What are the risks associated with asset finance?
TL;DR Understand the potential risks of asset finance, including depreciation, maintenance costs, contract breaches, and negative equity. We explain how to mitigate these financial exposures in the UK.
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What is the role of a broker in asset finance?
TL;DR Discover the essential role of an asset finance broker. They connect businesses with lenders, securing competitive rates and appropriate terms for equipment, vehicles, and machinery.
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Can I get asset finance if my business has a poor credit history?
TL;DR Businesses with bad credit often struggle for finance. Find out if you can get asset finance if your business has a poor credit history and what options are available to secure equipment.
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How do I apply for asset finance?
TL;DR Learn the step-by-step process for applying for asset finance in the UK. We cover the required documentation, different types of finance, eligibility criteria, and typical timelines.
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How long does it take to get approval for asset finance?
TL;DR Approval times for asset finance range widely, from 24 hours to several weeks. Discover the key factors that influence how long it takes to get approval for asset finance and how to speed up your application process.
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What documentation is needed to apply for asset finance?
TL;DR Applying for asset finance requires specific documents. We detail the essential financial statements, identification, company structure proof, and asset details needed to streamline your application process.
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What factors affect approval for asset finance?
TL;DR Understand the crucial factors affecting approval for asset finance in the UK. We cover borrower creditworthiness, asset valuation, business viability, and loan terms.
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What are fixed and variable interest rates in asset finance?
TL;DR Understanding fixed and variable interest rates is crucial in UK asset finance. Learn how each type works, the risks involved, and which might be best for your financial needs.
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What is residual value risk in asset finance?
TL;DR Residual value risk is the chance that an asset’s market value at the end of a finance term is less than predicted. Understand how this risk affects leases, hire purchase, and businesses in the UK.
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What are the exit options at the end of an asset finance agreement?
TL;DR Ending an asset finance deal? Discover the options available, including ownership through a Hire Purchase Option to Purchase fee, refinancing, selling the asset, or simply returning it. Understand the pros and cons of each choice.
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What is contract hire in asset finance?
TL;DR Contract hire is a popular form of vehicle leasing within asset finance, allowing businesses to use assets without ownership. Learn how this fixed-cost, off-balance-sheet solution works for UK companies.
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Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status. We may receive commissions that will vary depending on the lender, product, or other permissable factors. The nature of any commission will be confirmed to you before you proceed.

More than 50% of borrowers receive offers better than our representative examples

The %APR rate you will be offered is dependent on your personal circumstances.

Mortgages and Remortgages

Representative example

Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

Secured / Second Charge Loans

Representative example

Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

Unsecured Loans

Representative example

Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

Authorised and regulated by the Financial Conduct Authority – Number 681423
The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

Website www.promisemoney.co.uk