Expanding your fleet of vehicles is a great way to increase the growth and earning potential of your business. But it can often be difficult to gather the funds you need to buy those cars outright. Thankfully, there are plenty of options available for financial support.
One is to borrow money from your bank to purchase those assets immediately and pay back the loan over time. However, the variable interest rates and obligation to secure the loan can seriously impact your cash flow management. And if you’re a small business or startup, you might not even qualify for a bank loan at all.
Fixed-rate car asset finance agreements, on the other hand, let you fund vehicles by securing your contract against those vehicles themselves or other existing assets. This removes the financial risks associated with bank loans and lets you spread the cost of new assets over time while protecting your working capital.
That’s not the only reason to choose car asset finance over a bank loan, though. In fact, there are plenty of reasons why asset finance can be the right choice for your business. And if you get in touch with the finance experts at Kane Financial Services, we can even match you with market-leading deals exclusive to the broker community.
Top 9 reasons to choose car asset finance over a bank loan
No risk of bankruptcy
A car asset finance agreement secures your loan against the vehicle or existing assets you offer as collateral. If you can’t make payments for any reason, the lender can seize those assets to cover what you owe. This ensures that, even in the worst case scenario, your business is protected against bankruptcy and closure.
Agreements are fixed
In some loan agreements, banks reserve the right to recall the loan in full at any time. But with car asset finance, provided you make payments as agreed, your lender won’t suddenly cancel your agreement.
That said, it’s always important to read your contract thoroughly so you have a full understanding of your rights and what’s required. When you apply for car asset finance through Kane Financial Services, we take great care to match you with deals that best suit your needs and means. With our support, you can enter into a low-risk car asset finance agreement with total confidence.
Fixed interest rates
Both bank loans and car asset finance agreements are subject to interest. The difference is that while bank loans typically have variable rates of interest, car asset finance interest rates are fixed. That means you’ll always know how much you owe each month, making it much easier to budget effectively.
Easier lending criteria
Bank loans for businesses often carry strict terms and conditions. This can make it incredibly difficult for small businesses, startups and those with poor credit to get the funds they need to thrive. Since independent car asset finance lenders have more freedom to choose their clients, it’s much easier for businesses of all kinds to qualify.
Higher lending limits
Just as with their terms and conditions, banks often have strict lending limits. But independent car asset finance lenders are free to decide their level of risk, they can choose to lend you much more than a high street bank. That means you can purchase more vehicles or those of a higher quality to grow your business at speed.
But what if you need to borrow more than a single provider is willing to lend? Don’t worry. At Kane Financial Services, you can get bespoke asset finance agreements that allow you to borrow from multiple lenders, letting you build your dream business.
Faster application process
The process of acquiring a traditional bank loan isn’t designed for speed. Application and approval take a very long time, and waiting lists can be extremely long. But if you’re an established business with good finances, strong credit and all the necessary documentation prepared, you can qualify for car asset finance in a matter of hours.
Doesn’t tie up lines of credit
Credit is a valuable and limited resource that can accelerate the growth and success of your business or protect you against unforeseen financial problems. While taking out a bank loan uses up one of these lines of credit, that’s not the case for car asset finance. This gives you more options for funding your business and helps keep you in a strong financial position.
Funds temporary assets
Sometimes, you only want vehicles for a limited time. That might be because you need to handle greater volume or because you want to offer the latest and greatest vehicles at all times. In this case, buying cars outright when you only want to use them temporarily is extremely inefficient in the long run.
Under certain car asset finance agreements, you don’t have to take ownership of the vehicle at the end of your lease period. And if you choose contract hire, the lender even buys and maintains the fleet on your behalf, and is responsible for them once your contract expires.
This lets you use these assets to enhance your businesses without buying them outright or taking costly responsibility for their disposal once your need for them is finished.
Spreads tax benefits
Purchasing a vehicle outright provides a large tax saving in the financial year in which you bought it. But by spreading the cost of the vehicle over time with asset finance for cars, you can unlock greater tax savings across multiple years. This makes it easier to settle your annual tax bill across the length of your contract.
Get market-leading deals in Northern Ireland and the UK
Many high street lenders offer car asset finance. But the very best deals are often exclusive to brokers such as Kane Financial Services.
For more than 35 years, we’ve secured funding with exceptional rates and terms for businesses across Northern Ireland and the UK. Apply for asset finance online today and we’ll be in touch as soon as possible to discuss your options.