What Is Asset Finance?
Asset finance is the fastest growing finance option for the UK agricultural industry. AFP is unique in offering a one stop shop for all your finance requirements. Our hire purchase and leasing options enable you to finance the more traditional asset classes such as equipment, machinery and vehicles. In addition, AFP provides secured loan finance for new agricultural land and/or building purchases as well as the option to refinance unencumbered land and/or buildings to generate funds for working capital and expansion projects.
We offer a full range of simple finance solutions to our customers. Using our expertise in the industry we will review your business requirements and help you choose the product that best suits your needs. To get an idea of the different types of finance solutions we offer please select from the below list for a brief explanation of each option.
Finance Agreements Available:
A hire purchase agreement allows you to spread the cost of an asset over a fixed period in line with your business cash flows keeping your working capital intact.
With hire purchase agreements, you select the asset and supplier, but repay us in instalments to acquire and own the asset over a fixed term. This allows you to claim capital allowances and offset interest payments against your taxable profits, as well as reclaiming VAT on the purchase price.
If you would like to unlock equity held in your existing assets we also offer the solution of a sale and hire purchase back where we purchase the asset from you and simultaneously hire it back to you via a hire purchase agreement.
A finance lease allows you to select and use an asset by paying rentals over the term of the agreement. The tax benefit of a finance lease is the ability to offset the rental cost against your taxable profits. Your cash flow is eased as VAT is payable on the rentals only, rather than on the purchase cost of the asset, resulting in a lower upfront cost.
At the end of the finance lease you can choose to either sell the asset and receive the full net proceeds, enter into a secondary rental period at significantly reduced rentals or return the asset to us.
If you would like to unlock equity held in your existing assets we also offer the solution of a sale and lease back where we purchase the asset from you and simultaneously lease it back to you via a finance lease agreement.
An operating lease is an off balance sheet finance product which provides a cost effective solution, allowing you to use high value assets for an affordable rental. We purchase the asset and it is owned by us with your lease repayments calculated by taking into account the estimated resale value at the end of the term. An operating lease removes the residual risk from you, keeps rentals down and doesn’t affect the gearing of your business.
At the end of the lease term, we are responsible for disposing the asset and bear the risk of recovering the residual value.
Secured Business Loan
Secured business loans can be used to purchase new agricultural land and/or building purchases as well as the option to refinance unencumbered land to generate funds for working capital and expansion projects. We will instruct an independent valuer from our approved panel to value the asset that you would like to use as security.
The interest element of your loan repayment is tax deductible.