INTRODUCTION
Most businesses need to use a variety of assets in order to provide a service or manufacture a product for their customers. The term "Asset Financing" refers to the alternative financial methods that can be used to acquire or rent these business assets without using valuable working capital. Assets can range from equipment such as computer/telephone systems, photocopiers, office furniture, restaurant equipment, plant and machinery; to larger assets such as ships, aircraft, lorries, vans, company cars, forklift trucks and buses.
The main reason the majority of companies lease rather than purchase equipment is to reduce their tax bills and limit capital outlay. Paying for assets outright with cash, can also have an impact on cash-flow, credit status, bank exposure (especially during times of lean trading) and available funds for growth.
There are several ways to finance an asset:
