What is asset finance?
An asset finance loan definition is that this is a type of borrowing that businesses can use to get access to certain assets, such as physical equipment like machines or vehicles, or things such as training or software, generally on a leased basis. It enables businesses to spread the cost of these types of business investments, rather than having to pay the full price up-front. This type of finance agreement can be used for anything from large transportation assets and any associated infrastructure, nationally or globally, through to providing access to machinery or office fittings.
The lender will essentially purchase the assets and then lease them to the business for the period of the agreement. The specifics of asset finance agreements can vary, depending on the assets involved and the individual circumstances of the business, and there are two main types of asset finance lease: finance leases and operating leases.
Types of asset finance
In the case of a finance lease, these tend to be longer leases that are designed to last for the majority of the useful lifetime of the asset. The lender will retain an interest in the asset, but the business leasing the asset will be responsible for maintaining it, paying any associated taxes and ensuring that any insurance required is in place. It is common in this type of asset finance agreement that ownership of the asset can be transferred at the end of the lease term, subject to certain conditions and payment requirements being met.
Operating leases tend to be shorter term, but again the upkeep and maintenance of the asset is the responsibility of the borrower, or lessee. It can be possible for the lessee to ask for an extension of the lease term if they wish to retain their access to the asset for longer than the original asset finance agreement, subject to any changes requested by the lender.
Asset-based finance can be complex for all parties involved in the agreement, even more so if global considerations need to be taken into account, such as different legislation or governing bodies and authorities in different countries.
Stephensons have the experience and proven track record of successful outcomes that you’d expect from specialist asset finance law firms. Our commercial litigation team have helped many businesses, of all sizes, with their financial agreements and offered the necessary legal support in this area. From SMEs to large global corporations, it’s important to be aware of all of the legal implications of this type of borrowing and what you can do you do come across any difficulties.
Advice and assistance in asset finance disputes
We have decades of experience in dealing with disputes arising in:
- Hire agreements
- Lease agreements
- Hire purchase
- Asset finance products
We can assist you by advising you of your rights and liabilities under asset finance agreements, whether it be for heavy plant and machinery; vehicles or office equipment, and in all types of financing agreements, including hire purchase; sale and leaseback or hire agreements.
We have experience in dealing with asset finance agreements dealing with construction plant; agricultural equipment; office and IT equipment.
Where problems arise we can work with you and your funder to find a solution enabling you to retain the equipment, if needed, whilst meeting your ongoing financial commitments and obligations; or we can find a final settlement solution to suit you and your business.
Where disputes arise and claims are made you or your business we can advise you on your liability, the options available to you and work to secure a satisfactory result for you.
We are proud of our reputation in protecting our clients’ businesses. We avoid litigation wherever possible and instead try to help you resolve any business disputes or issues through effective communication and mediation. Maintaining business relationships is key, so our working practices and approaches always aim to achieve this whenever possible. From pre-agreement advice to debt recovery services, if things don’t work out as expected, we can help your business to achieve the best possible outcome on every occasion.
In the event that a dispute arises with an existing lease, or if you simply want expert advice on any aspect of asset finance law in preparation for a potential new agreement, Stephensons can help at any and all stages of the process. Get in touch today on 0161 696 6170.