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How does Asset Finance work?
Commercial asset finance can be broken down into three distinctive parts; pre-agreement, during the course of the plan, and finally the agreement’s end.
Before the finance agreement
When businesses need new equipment, they identify what is required and who to buy it from. They then contact Portman to discuss their finance options. Depending on the goals of the business and the trading situation, customers decide whether lease finance or hire purchase is right for them.
During the asset finance plan
Based on the chosen option, a finance proposal is put together on behalf of the customer. The preferred lenders, including, potentially, ourselves at Portman, will review the application and decide whether to make an offer. The most favourable terms available to a business are; secured deposits, monthly repayments and security. Once these are agreed upon, a financial agreement is put in place.
During the repayment schedule, any asset remains the property of the lender.
After the asset finance plan
At the end of the term, options vary depending on the finance agreement. Hire customers can buy the asset outright for a nominal fee or balloon payment. Lease finance customers can continue renting, hand the assets back, or usually arrange to purchase the items for an agreed fee.
