Asset Finance

Asset finance is funding used to acquire or use business equipment, vehicles and other assets, commonly through hire purchase or leasing.

Asset refinance raises funding against the value of eligible business assets already owned or financed, sometimes settling an existing agreement as part of the transaction.

A balloon payment is a larger payment scheduled at the end of a finance agreement, in addition to the regular instalments.

Guaranteed future value is a contractually specified future asset value used in some finance arrangements, subject to the conditions written into the agreement.

Hard assets is a commercial-finance term commonly used for tangible assets with identifiable physical value and a potential resale market.

Hire purchase is an agreement to hire an asset with an option to acquire ownership after the required payments and contractual conditions are met.

Refinancing means replacing or restructuring an existing finance commitment with a new arrangement, which may change its cost, term, security or lender.

Residual value is an estimate of what an asset will be worth at the end of a specified period, allowing for its expected age, condition and use.

Sale and leaseback is a transaction in which a business sells an asset and then leases it from the buyer so it can continue using it.

Soft assets is a commercial-finance term for assets that may offer a lender limited resale security, such as certain IT systems, software or specialist fit-outs.

Unregulated asset finance describes an asset agreement outside the relevant consumer-credit regulatory regime; its scope depends on the borrower, purpose and legal structure.