Chattel mortgage, lease, or sale and leaseback — the right finance structure can matter as much as the rate. Here's a plain-English look at how each one works.
Types of Asset Finance
Every asset or equipment purchase can be financed differently — the right structure depends on how you plan to use it, and for how long.
Full Asset & Equipment List →You take ownership of the asset from day one, with the lender holding a mortgage over it as security until the loan is repaid. Repayments are typically fixed, and a balloon payment can be structured in to help manage cash flow. Your accountant can advise on how this may suit your business's reporting.
The lender buys the asset and leases it to you for an agreed term at a fixed repayment. At the end of the lease you may be able to make a residual payment and keep the asset, refinance the residual, or hand it back. Ask your accountant how this structure fits your circumstances.
You use the asset for an agreed period without taking on ownership, which can suit equipment or technology that's regularly upgraded. Fixed repayments run for the term, and the asset is simply handed back at the end unless another arrangement is agreed.
Already own an asset outright? This structure lets you sell it to a financier and lease it straight back, freeing up cash while you keep using it day to day. It may suit businesses looking to release equity tied up in existing equipment.
If your current asset finance no longer suits your business — the rate, the structure, or your cash flow has changed — refinancing partway through the term may be worth exploring, whether that's adjusting the structure or moving to a different lender.
When a balloon or residual payment falls due at the end of a loan or lease, it doesn't have to be paid out in one hit. Refinancing the balloon into a new arrangement can spread that final payment over a further term, subject to lender assessment.
If you regularly work with people who need vehicle or asset finance, a referral arrangement with Allsorts of Loans could work for both of you. Accountants, financial planners, dealers and real estate agents — we pay referral fees and make the process simple for your clients.
Talk to Us About Partnering →Get The Structure Right First.
Our no-application-fee offer is extended. Self-employed, sole trader, company director — any loan, any size, direct to us.