Asset Finance | Construction | Millbrook Business Finance

Asset Finance For Construction Industry

Investing in high-quality construction equipment is a fast way to transform your business. Specialist machinery and equipment may require a large capital outlay. These costs can mount up when purchased outright. Asset finance for the construction industry or construction equipment leasing is the ideal solution as your business can access funding for equipment that can take your operations to another level.

If you want your business to grow but lack the sufficient working capital to make a purchase, asset finance lets you unlock your future potential. Construction equipment leasing or financing also allows an organisation to spread costs across a monthly payment scheme to protect cash flow. At Millbrook Business Finance, whether you want to invest in bulldozers, plant machinery, cranes, or set up a loan for franchise, our expert team sources financing options tailored to your construction company.

What Is Construction Asset Finance?

There are two main types of asset finance solutions: hire purchase and leasing. Hire purchase allows your business to buy the equipment straight after the agreement has been settled. Under this form of construction equipment financing, businesses make a purchase and then spread the cost of repayments, typically between one and seven years with added interest. Normally the VAT associated with the purchase is paid upfront, however, there are options to defer the VAT for up to three months. With hire purchase, the business owns the purchased item, and it will appear on the business’s balance sheet.

The second type of asset finance is construction equipment leasing. A leasing agreement can be an effective way to access items that a business needs to thrive. Again, businesses can spread the cost of purchase between one and seven years. VAT is paid on the monthly lease repayments as opposed to upfront – an advantage for cash flow. Construction equipment leasing also offers tax benefits as leasing repayments are tax-deductible and can be offset against business profits. At the end of a primary lease period a business can usually continue leasing (often with cheaper repayments), purchase the assets (usually for a small fee), or return the asset to the leaser.

How Does It Work

Construction asset finance provides companies with access to funds so they can purchase equipment and machinery. As part of any business’s journey in the construction industry, they will need to grow to continue their success; this involves investing in new equipment to take on new jobs and challenges. Construction asset finance or loan for franchise protects cash flow and enables your company to invest heavily in your business.

Once you know what equipment you want to purchase, reach out to Millbrook’s experienced team or use the quick and easy eligibility checker to establish if you qualify for finance. Our team will work with you to create a bespoke finance agreement for your business.

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Advantages

Typically, only small upfront payments are required and, depending on the agreement, potentially no upfront payment will be needed.
Allows your business to spread the cost of construction equipment over time, with a maximum period of 7 years.
Transparent fixed payments with no hidden costs make it easy to budget long-term.
Secure the funding on the value of the construction equipment you’re financing.
Low-interest alternative to bank loans and overdrafts that allow you to invest capital back into your business

Disadvantages

If you default on the agreement, the equipment that has been used as security can be repossessed.
Often agreements provided by lenders will be longer than a one-year term. While this may be beneficial to your company, construction asset finance is a mid to long-term product.
If damage occurs that isn’t covered under maintenance or servicing, then you may have to pay for this. However, you can take out insurance that covers this damage.

What Are The Fees And Interest Rates?

There are no arrangement fees to pay with construction equipment leasing. The only fee that may be charged is an administration fee which is typically around £150 + VAT. Everything is disclosed upfront to provide you with all the information available so you can make the best decision for your business.

As the asset is used as security on construction equipment finance, the interest rate is usually lower than a traditional business loan. This reduces the risks involved in the agreement to incentivise lenders to offer more competitive deals.

Is There Heavy Equipment Financing For Bad Credit?

At Millbrook, our team achieves an industry leasing approval rate when securing asset finance/loan for franchise or direct to our clients’ business. We believe that the right businesses deserve access to finance, regardless of whether they have bad credit or not. When working with us your dedicated account manager will work tirelessly to secure an agreement that benefits your business.

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Why Choose Millbrook Construction Asset Finance?

Increase Your Opportunities
At Millbrook, we work with over 80 UK partnered lenders which increases your chances of securing finance.

Simple To Access Finance
Construction financing doesn’t have to be difficult; our dedicated account managers ensure the process is stress-free while using their experience and expertise to secure the best deal for your business.

Avoid Hidden Fees
We don’t charge any arrangement fees under any circumstances. Honesty and transparency are crucial core values to how we operate, you can trust we work to deliver access to finance that benefits your business.

Unmatched Interest Rates
Using the construction equipment as security reduces interest rates compared to bank loans or overdrafts. Our team’s close relationship with lenders also enables us to secure the most competitive rates for SMEs.

Compare Hire Purchase & Leasing Asset Financing

Hire Purchase

A form of finance agreement used for construction equipment leasing, machinery, and plants, or vehicles such as tractors and heavy trucks.

Key Features:

Fixed or variable rates.
Spread the cost of ownership over the working lift of the asset.
Repayment arrangements of up to 7 years are available.
VAT can be postponed for a period of up to three months.

Leasing

A form of finance agreement used to lease construction equipment, machinery, and plants, or vehicles such as tractors and heavy trucks.