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Asset Finance · The Basics

The Asset Finance 100.
The Basics

Focus: Definitions, core concepts, and suitability.

19+Questions
100%Expert Answers
FCARegulated
How do you calculate the total cost of asset finance?
TL;DR Learn how to calculate the true total cost of asset finance, covering interest rates, fees, residuals, and VAT implications. Understand the variables affecting HP, lease, and hire agreements.
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How do interest rates affect asset finance costs?
TL;DR Understand the relationship between central bank interest rates (like the Bank of England Base Rate) and the cost of asset finance agreements. Learn how variable and fixed rates impact budgeting.
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What happens to the asset at the end of a hire purchase agreement?
TL;DR Understand the three outcomes for the asset when your Hire Purchase (HP) agreement ends: ownership, return, or refinancing. Learn about the 'Option to Purchase Fee' and your rights in the UK.
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What happens if I miss a payment?
TL;DR Missing a payment can seriously impact your finances and credit score. Learn the immediate steps to take, the potential consequences, and how to contact your lender for support.
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What types of assets can be financed?
TL;DR Learn about the various assets you can finance in the UK, from residential property and commercial real estate to vehicles, plant machinery, and business assets.
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Is there a maximum amount I can borrow through asset finance?
TL;DR Asset finance borrowing limits aren't fixed; they depend on the asset value, business profile, and lender policy. Understand factors that determine the maximum you can borrow.
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How is the monthly payment determined in asset finance?
TL;DR Discover how monthly payments are calculated in asset finance. We break down the key factors: asset cost, interest rates, term length, deposit, and residual value, specific to UK agreements.
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how does asset finance work?
TL;DR Understanding how asset finance works is crucial before you apply. Learn about different types of asset finance, eligibility criteria, the application process, and potential risks involved. This guide clarifies the process and helps you make infor…
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What are the different types of asset finance?
TL;DR Explore the main types of asset finance available to UK businesses, including hire purchase, leasing (operating and finance), and refinancing. Understand the benefits and risks.
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Is asset finance suitable for small businesses?
TL;DR Asset finance is a powerful tool for UK small businesses needing essential equipment or vehicles without huge upfront costs. Learn how leasing, Hire Purchase, and refinancing options can boost your growth.
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What is asset finance
TL;DR What is asset finance? Learn how UK businesses use asset-backed lending to fund equipment, improve cash flow, and manage growth with our comprehensive guide.
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How can I compare asset finance providers? What happens if the asset depreciates faster than expected?
TL;DR Learn how to compare UK asset finance providers, focusing on rates, terms, and fees. Understand the crucial impact of faster-than-expected asset depreciation on finance agreements like HP or leases.
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Are there any hidden fees in asset finance agreements?
TL;DR Discover the true cost of asset finance. We break down common charges like arrangement, documentation, and maintenance fees, explaining if there are any hidden fees in asset finance agreements you need to watch out for.
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Do I need a deposit for asset finance?
TL;DR Considering asset finance? Find out if you need a deposit for equipment leasing, hire purchase, or refinancing. We explain the factors that determine deposit requirements and how to secure 100% financing options.
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What is a finance lease?
TL;DR Discover what is a finance lease in the UK. We explain the definition, how it works, the key advantages for businesses, and the accounting implications of this common asset finance solution.
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Can I finance second-hand equipment?
TL;DR Want to know if you can finance second-hand equipment in the UK? Yes, you can. Explore Hire Purchase, Finance Leasing, and refinancing options for used assets, plus eligibility requirements.
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What happens if I want to end my asset finance agreement early?
TL;DR Thinking of ending your UK asset finance early? Understand your options, from Voluntary Termination (VT) to settling the remaining balance. Learn about penalties and costs involved.
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What is the typical interest rate for asset finance?
TL;DR Understanding the typical interest rate for asset finance is crucial for business planning. Rates vary widely based on asset type, loan term, business credit score, and lender. Learn what factors influence costs.
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What is the difference between secured and unsecured asset finance?
TL;DR Understand secured vs unsecured asset finance. Learn how collateral affects interest rates, loan terms, and risk levels for UK borrowers seeking business or personal funding.
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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