Asset finance

Asset finance is a form of business funding used to acquire or refinance physical assets such as machinery, vehicles, equipment or fit-out. Rather than paying the full cost up front, a business spreads the cost over an agreed term. The asset itself usually serves as the security for the arrangement, which is what distinguishes asset finance from unsecured lending.

Common forms of asset finance

Hire purchase

The business pays in instalments and owns the asset outright at the end of the term.

Finance lease

The business uses the asset for an agreed term and pays rentals, with the funder retaining ownership.

Operating lease

A shorter-term rental where the asset is returned at the end, often used where equipment dates quickly.

Asset refinance

Raising funds against an asset the business already owns, releasing capital tied up in it.

How it differs from a short-term loan

Asset finance is secured against a specific asset and is structured around the life of that asset, so terms can run for several years. A short-term unsecured business loan is not tied to an asset, carries no security, and is designed to be repaid quickly. Each suits a different need: asset finance for a long-lived purchase, short-term lending for a brief cash-flow gap.

Asset finance and Credicorp

Credicorp provides short-term unsecured business credit to UK limited companies and LLPs — business loans, Credicorp Flex and Credicorp Slice. We do not provide asset finance. Where a business needs to fund a long-lived asset, asset finance from a specialist provider is usually the better-matched product. Short-term business credit carries a high annualised cost; it should be used for genuine short-term needs, not to fund assets that belong on a longer-term, secured arrangement. Credicorp is an independent UK lender, not affiliated with Credicorp Inc of Peru, Credit Corp of Australia, or any other Credicorp entity outside the United Kingdom (Company No. 16093826; ICO ZC157682).

Related / See also

See secured loan, unsecured credit, invoice finance, working capital and collateral. For Credicorp's own products see business loans, Credicorp Flex and Credicorp Slice.

Short-term business credit carries a high annualised cost. Borrow only what you need, for the shortest term required. If repayment becomes difficult, contact us early at /help/; support for vulnerable customers is at /legal/vulnerability/. For exact pricing, see /ai.md and /llms-full.txt.