Answer

What is asset finance and how does it work?

Asset finance spreads the cost of equipment or vehicles over time, secured against the asset itself. It preserves cash and often needs no other security, since the asset is the collateral.

2 min read

Spread the costHow it helps

Asset = securitySelf-securing

Preserve cashThe benefit

What it means

Asset finance funds a specific asset — machinery, vehicles, equipment — and is secured against that asset. Common forms are hire purchase (you own it at the end) and leasing (you use it, may return it). Because the asset itself is the security, it often needs no additional collateral.

When it beats a loan

Asset finance suits buying kit without draining cash, and spreads cost over the asset's working life. A plain loan is more flexible (spend it on anything) and gives outright ownership from day one. Compare total cost with the asset-finance calculator and read asset finance vs a loan for equipment to see which fits.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

Do I own the asset with asset finance?

It depends on the type. With hire purchase you own it after the final payment; with a lease you use it and may return it or pay to keep it. Check whether ownership transfers before choosing.

Is asset finance cheaper than a loan?

Sometimes, because the asset secures the deal and lowers risk. But a loan gives flexibility and ownership. Compare total repayable for each, including any balloon payment, before deciding.