Equipment Finance Solutions: How To Decide Between Traditional Finance Methods Or The Latest Rental Options


While First Asset Finance is able to offer a wide spectrum of financial products and options to businesses such as traditional instalment sales (hire purchase), it can also offer customers a new operating rental solution. This is fast proving very popular among clients, whether they are a small to medium sized businesses or a large corporate entity.

Business owners, Financial Directors and senior management are expected to evaluate the best financial solution available so that a business can manage its cash flow and the best balance sheet and tax structures to optimise financial growth. Businesses today don’t want large amounts of debt visible to stakeholders nor do they want reduced returns on assets.

First Asset Finance’s operating rental solution is fast gaining popularity among companies given that the structure is off balance sheet. This is extremely useful for a growing business that needs to obtain traditional bank finance for increased working capital, overdraft facilities or property finance.

The other major advantage of this solution is that the operating rental payments are treated as an operating expense, allowing the company to reduce taxable income in each financial year. Tax-paying companies with strong cash flow should explore this option, especially prior to purchasing new equipment that has a life span of five years or less. Given the rapidly changing landscape of technology and high obsolescence value of equipment in today’s environment, companies need to continuously consider tax efficient ways of financing new equipment.

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