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Finance the purchase of expensive equipment, vehicles or technology with our Asset Finance solutions. Purchase assets on affordable credit & choose to retain the ownership of the asset.
Hire Purchase – Asset Finance to Power the Purchase of Important Assets: All successful businesses have one thing in common – significant investments and reinvestments. If you are running a business, you cannot afford to keep taking all the profits off the top of cash flow. A certain percentage always needs to be reinvested in order to grow the business and keep up with the changing landscape of your industry. A sizeable part of this investment is usually directed towards the purchase of new assets. These assets can range from the state-of-the-art technology to a much-needed fleet of vehicles. Even smaller assets like everyday electronics may cost your business hundreds, if not thousands of pounds. Not all businesses are in a position to bear these costs upfront. This is where Asset Finance comes to the rescue.
Hire Purchase is one of the most popular types of Asset Finance packages. With Hire Purchase, businesses can spread the entire cost of the asset across lighter instalments. This allows even small businesses to purchase important but expensive assets that they may otherwise wouldn’t be able to afford.
Hire Purchase is a common Asset Finance variety that suits most UK businesses if not all. Many small and medium sized businesses rely on our Hire Purchase solutions to routinely fund their asset acquisition projects. Hire Purchase is also commonly referred to as ‘Lease Purchase’. For all practical reasons, you can treat Hire Purchase as a loan that aims exclusively to fund the purchase of a particular asset. It is important to note that Hire Purchase allows you to claim the ownership of the asset at the successful conclusion of the repayment term. Therefore, most lenders base their Hire Purchase Asset Finance decisions on the creditworthiness of the business. We advise you to make sure that your business has a clean record of repayment and a healthy credit score in order to maximize your chance of getting multiple offers.
Hire Purchase is a primary source of Asset Finance for a number of business – and with good reasons. Let’s take a look at some of the important advantages that Hire / Lease Purchase has to offer:
In the present economy, it is becoming increasingly difficult for small and medium businesses to own assets. To make the matters more challenging, a significant share of the profits goes towards mortgage repayments, at least in the younger years of a business. Getting a high-street lender or a bank to extend a line of credit isn’t an option in such cases. Hire Purchase allows businesses to overcome these problems with relative ease. A Hire Purchase contract allows the borrower to claim the ownership of the asset. This is possible only when the assumed price of the asset at the time of the term conclusion is rolled into the monthly or quarterly repayment schedule. Thus, with the help Hire Purchase, businesses can plan and purchase expensive assets without hurting the cash flow.
Hire Purchase lets your business benefit from the power of Asset Finance with affordable repayments. Most Lenders let you choose between monthly and quarterly repayment options. These options typically depend upon the creditworthiness of your business, the type of the asset in question and its market value.
Cognis Capital Partner’s Asset Finance solutions allow you to choose from fixed rate loans as well as tracker loans. You can choose the more affordable option of these two by weighing your repayment potential against the loan term. Our team of experts is always at hand to help you make the most pragmatic decisions in this regard.
In most cases, your business will be able to claim tax deductions based on the interest rate component of your repayments. Many Lenders also pass on the writing down allowances to the borrower. All these factors, in unison, help bring the repayment amount down.
Choose from the Most Affordable Hire Purchase Asset Finance Offers: Hire / Lease Purchase, although popular, comes with its own risks. Lenders rarely get to benefit from the ownership of the asset. This greatly reduces the cover against risks of non-payment. Therefore, it’s very common for businesses to see their Hire Purchase application being turned down. Your business, however, doesn’t have to follow this route. Working with a diverse and highly experienced range of specialist, UK-wide Lenders, we make sure that your application has the best chance of success. From handling all of the paperwork to ensuring that you get to use the asset as soon as possible, our Asset Finance team looks after every aspect of your Hire Purchase application.
Incorporate expensive assets in your business operations with our robust Finance Lease services. Asset Finance at affordable, flexible monthly rentals and low outlays.
To any business, regardless of its size, assets are important. After all, a considerable part of its worth is, at most times, tied up in various assets. These assets play a crucial part in the growth of the business, as well. Some assets like land and buildings provide an intangible value to the business, while others like machinery, vehicles and technology are essential for the day to day operations to continue. But it’s not always possible for businesses to purchase an asset by paying for it upfront. In fact, scenarios arise in which purchasing an asset is neither feasible nor reasonable. Finance Lease – a specialty type of Asset Finance – can be the ideal solution in such cases.
Finance Lease is a subset of Asset Finance. It allows the borrower to ‘lease’ an asset for a certain period of time. The borrower never really owns the asset, either fully or in part, in this case. Finance Lease is an important source of financing for businesses of all sizes. While discussing Finance Lease, it becomes more appropriate to regard the lender as the ‘lessor’ and the borrower as the ‘lessee’.
Finance Lease follows the same template for the most parts. However, there remains one notable difference. Common assets like vehicles are usually already owned by the lessor. Such lessors are known as specialist Lenders, and they exclusively deal with the assets they own. To put it simply, the Lender and the supplier are one and the same. In such cases, the lessee can directly lease the asset from the lender, thus avoiding much of the paperwork. If the Lender doesn’t already own the asset, you may have to look for a specialist supplier. Regardless of these possibilities, the supplier will always claim the ownership of the asset at the successful conclusion of the finance term. Such leasehold transactions are often financed through leasehold mortgages.
Finance Lease helps the borrowing business on multiple fronts. We have summed up the prominent advantages of leasing an asset below.
The most attractive advantage of choosing Finance Lease over other Asset Finance types is the affordability. However expensive the asset may be, your business is always very likely to be able to afford the monthly rentals. This allows you to preserve the cash flow so that it can be used towards other expenses such as settling the salaries or other overheads.
The Lenders assume lesser risk when they rent an asset out. Therefore, most Lenders agree with a repayment schedule that is in sync with your sales cycle. In addition, you can choose to terminate the Finance Lease prior to the end of the loan term by paying a small surcharge. This, however, is at the Lender’s discretion.
This is another way in which a Finance Lease can help you afford expensive assets. You will have to pay the VAT only on the rental payments. Since you will not own the asset at the end of the term, you won’t have to pay any capital gains taxes that may be due upon the sale of the asset. Furthermore, the rentals are tax deductible (against profits) in most cases.
The answer to this question varies from one case to another. This aspect is usually dealt with while drawing the lease contract. Generally speaking, the lessee will be responsible for the safety and the maintenance of the asset. The lessor will assume the costs of depreciation and other risks that come with the ownership of the asset.
Our operating lease brokerage services help UK businesses find the right asset lender for one-off, short-term asset requirements. Fast decisions, affordable monthly repayments.
The world of business is full of uncertainties. With these, however, spring opportunities as well. Businesses that manage to make the most of these opportunities while minimizing the adverse impacts of uncertainties succeed by outpacing the competition. If your business comes across a growth opportunity, you can rarely afford to let it pass. If such opportunities need you to acquire newer equipment, more cutting-edge technology or a niche vehicle, Operating Lease can be the most promising way of tackling your financing problems.
An Operating Lease is quite similar to Finance Lease in that both leases enable you to ‘rent’ the asset over a period of time. The key difference between the two is the length of the contract. While Finance Lease contracts typically stretch over months – years, in some cases – Operating Lease contracts usually conclude within weeks.
An Operating Lease is an ideal mode of Asset Finance for businesses that require the services of an asset for a short length of time. Perhaps, a practical example can better explain this need. Example Let’s consider the example of a small waste management business. The business, operating in a mid-sized town, has just enough resources to operate at the maximum capacity. However, it manages to secure an important contract to dispose industrial waste in a nearby factory. The business owner feels that they could speed up the entire process by supplementing their resources with 10 site-dumpers. The business can neither afford nor need to purchase these assets. So, the owner decides to draw an Operating Lease to rent the vehicles for a 14-day period. At no significant cost, the business manages to use the fleet of site-dumpers and successfully complete the project.
A well-negotiated Operating Lease can bring numerous advantages to the borrowing business. Some of these are discussed below.
Operating Leases allow the business to use the asset without any significant outlays. The daily or weekly basis rentals cover the cost of the asset. This is an immensely important advantage to have for businesses that can’t afford to divert any cash flow towards new assets. In addition, we negotiate on your behalf with the lessor on your behalf to optimize the residual asset value. This can further lower the rentals.
It is possible to fine-tune your Operating Lease contract so as to match your requirements. Since such contracts are active for shorter periods of time, you can extend or prematurely terminate the lease should you require to.
This is the defining feature of Operating Lease Asset Finance. Unlike other types of Asset Finance, assets acquired through an Operating Lease need not appear on your balance sheet. The rentals for the asset come directly from the operational profit and loss accounts of the borrower.
Since Operating Leases work on the same lines as Finance Leases, the responsibility of the asset usually lies on the lessee. This includes the safety, insurance and maintenance of the asset. However, it is indeed possible to negotiate these terms with the lessor. At the conclusion of the lease term, the lessor repossesses the asset.
If your business is in need of an asset for a one-off use, an Operating Lease can certainly be an option worth exploring. It is not, however, always easy to secure such a contract. Most high-street lenders do not have the resources to offer such financing products. Therefore, it’s vital that you work with experienced, responsible and specialist lenders. Having worked in the UK Asset Finance industry for over a decade, we have all it takes to help your Operating Lease application reach the most suitable and best placed lenders. High approval rate, industry-leading customer service and fair contracts are some of the hallmarks of our Asset Finance services that have helped many businesses like yours extract the best value out of assets.
Rent one or more vehicles from a vast array of options with our comprehensive contract hire services. Asset Finances to conveniently use vehicles with fixed, all-inclusive rentals.
Vehicles are among the most commonly bought, sold and rented assets in the UK business world. Most businesses feel the need to have at their disposal vehicles that can help their operations. These vehicles can range from regular cars for miscellaneous purposes to fleets of specialist vehicles to perform certain tasks. For a business, the need for a vehicle is indeed indispensable. However, we must also consider that vehicles depreciate much faster than other assets. Therefore, it’s a common practice – especially among small and medium sized businesses – to rent the vehicles as per requirement. Although this is certainly a great boost to the cash flow, the rentals aren’t always cheap – especially in case of industrial, heavy-duty vehicles. Contract Hire comes as a convenient way of overcoming this problem.
Contract Hire is the most flexible form of Asset Finance. For most parts, it is aimed specifically at facilitating the vehicle rental process between the lessor and the lessee. Many features of Contract Hire Asset Finance resemble those of Operating Lease. Hence, it’s not uncommon to find many people using these two terms interchangeably. Be that as it may, it’s important to note here that there exists some important differences between Contract Hire and Operating Lease. The most prominent among these is the responsibility of the asset. An Operating Lease often allows both the parties to split the costs of asset maintenance, insurance and security. On the other hand, this responsibility is usually shifted to the lessee in a Contract Hire agreement.
Contract Hire is a micro-niche of Asset Finance. Therefore, the utility of this service is often limited in scope. Contract Hire may be the best option going forward for your business if your business: Requires one or more vehicles for a short length of time and this requirement is intermittent.
1. Aims to upgrade the vehicles in use (typically, every 3 years).
2. Prefers to preserve the cash flow and spread the costs of rentals in affordable instalments.
3. Is not in a position to Hire Purchase these vehicles.
Contract Hire carries all the advantages of Asset Finance, along with some specific positives of its own. We have summarized these advantages below.
Purchasing vehicles can severely dent the cash flow of any business. Contract Hire offers a solution to this by making the required number of vehicles available without the need of sizeable deposits. Renting a vehicle over a period of time is almost always more profitable than outright owning it.
While drawing up a Contract Hire agreement, we usually make sure that all the costs are rolled in. These costs usually involve the mileage projection, insurance, maintenance, processing fees, base rental and any interest, if applicable. This allows you to spread these costs in more manageable, monthly repayments. Many lenders also allow for the premature termination of the contract at no significant fees.
Contract Hire provides a thorough solution to acquiring vehicles. Right from sourcing the vehicles to reselling or disposing of them, all the factors can be rolled into the contract. This saves the borrowing business from having to deal with multiple agencies and pay processing fees many times over.
We have already seen that Hire Purchase is the best way to outright buy assets that your business is in dire need of. Contract Hire sits at the other end of this spectrum. Since it is essentially a rental agreement, you, as the lessee, will never own the asset in question. This saves you from the asset depreciation costs.
In compliance with the standard accounting practices prevalent in the UK, rented assets need not enter the lessee’s books. This helps you avoid the relevant tax implications. Most lessors also agree to passing the writing-down allowances to you, thereby reducing the effective rental amount.
Having access to the whole of market lessors across the UK, we can offer a number of add-on services for Contract Hire packages brokered through Cognis Capital Partners. Just some of these are:
1. Accident Management.
2. Security screening of drivers.
3. Flexi-hire packages.
4. Daily rental packages.
5. Comprehensive fleet management.
6. Fuel deduction and environmental incentives.
7. Advanced vehicle tracking.
8. Detailed performance reports.
9. Discounted revenue sharing.
Asset Finance can be quite tricky to tackle if you aren’t familiar with the intricacies of the agreement. Contract Hire is no exception to this. Many businesses get into generic, off-the-shelf Contract Hire packages that yield little positive impact. Cognis Capital Partners helps you find experienced vehicle lessors who are willing to mould the agreement to your requirements. This not only saves you a good deal of money, but also allows you to make the most of leased vehicles.
Refinance your existing assets and get access to additional cash flows. Affordable, fixed monthly repayments make it easier to lease the assets back from the buyer.
At any point during the lifetime of a business, a large percentage of the market value of the business remains tied up in various assets. Discounting prime assets such as land and other properties, there exist a number of valuable assets that a business may own. These assets are essential for the daily operations of the business. However, the capital stuck within these assets is often more than the business can afford. In such cases, the business can choose to refinance such assets to free up the working capital.
Asset Refinance is a popular financing tool that allows businesses to optimize the value of their assets. You, as the borrowing business, can choose to refinance assets like vehicles, equipment, machinery or raw materials so as to lease them back from the buyer. To be able to refinance an asset, the borrower needs to own the asset wholly or in part. Most lenders agree to refinance assets if the borrower’s equity in the asset is in excess of 50%. It is also common for businesses to refinance assets that are already financed under Hire Purchase Asset Finance.
Asset Refinance is a specialty financing tool. The working of Asset Refinance follows a more or less reverse order.
Your choice of the asset will determine the net working capital boost you can generate from refinancing. Typically, it’s advisable to choose an asset that you wholly own. Many businesses also prefer to refinance assets that depreciate at fast rates. For example, vehicles and electronics.
This is where Cognis Capital Partner’s vast experience and resources prove to be an asset in itself. Once you submit your Asset Refinance application to us, we’ll review, add the necessary detail around what the lenders wish to see and then forward it to specialist refinancers whom from experience we know are best placed and most likely to want your business. The refinancers then review and extend their offers back to us, which in turn we then communicate to you.
After reviewing all the offers, you can choose the one that addresses your needs the best. We then help you draw an Agreement in Principle for the refinancing of the asset.
Once the refinancing agreement is in force, the ownership of the asset changes hands. Now, the refinancer will own a certain equity in the asset, as per the deal. This will allow you to generate lump-sum working capital that was previously tied up within the asset. The refinancer then immediately allows you to lease the asset under a Finance Lease or Operating Lease.
Once you have leased the asset back, you will have to make the fixed monthly repayments as per the AIP. At the end of the lease term, the refinancing process concludes.
Benefits of Asset Refinance: Asset Refinance has many features that businesses of all sizes can benefit from. The most prominent among these are detailed below.
Working capital wields enormous power over the performance of any business. Much the reason why, businesses need to constantly explore opportunities to enhance their working capital. For small and medium sized businesses, getting a working capital loan isn’t always easy. Asset backed loans can be of help in such cases, but such loans tend to be interest heavy. Asset Refinance lets your business unlock the potential of the assets you have already invested working capital in. Your business can divert the additional working capital towards other heads such as reinvestments, overdraft settlements or marketing.
With Asset Refinance, your business can transfer the onus of the ownership to the buyer. This saves you from the adverse impacts of asset depreciation. For expensive assets, these savings could amount to thousands of pounds.
Asset Refinance allows your business to remove the asset from your books. This can translate to easier management of your profit and loss accounts. Additionally, the monthly rentals can be effectively offset against taxable profits.
Your One-stop Solution to Every Asset Refinancing Requirement: Cognis Capital Partners, a leading whole of market broker in the UK, has an illustrious track record of brokering profitable Asset Refinance deals for UK businesses of all sizes. Our long-standing industry presence and reputation allow us to curate attractive refinance offers from experienced lenders.