What is Equipment Finance?
Equipment can be purchased outright for cash or alternatively financed. Equipment finance offers different options to purchase or acquire the right to use the equipment and generally uses the equipment as collateral.
The different types of equipment finance (also known as asset finance) differ mainly on how ownership transfers (if at all). Sometimes the funder owns the equipment and you ‘rent’ or ‘lease’ it over a term. At some stage you may have the ability to own it near the end of the term of the agreement; it all depends on the contractual terms.
Deciding between these options requires careful consideration of cash flow, as well as whether you actually want to own the asset, and importantly there are tax and VAT implications.