Introductory guide to asset finance

Published by a ÀÏ˾»úÎçÒ¹¸£Àû Banking & Finance expert
Practice notes

Introductory guide to asset finance

Published by a ÀÏ˾»úÎçÒ¹¸£Àû Banking & Finance expert

Practice notes
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What is asset finance?

Asset finance is a method of providing financing for the purchase of particular tangible movable assets. The structure of the financing used will depend on the nature of the asset being purchased which range from cheaper, smaller items used in the day to day running of a business (such as a photocopier) to very expensive, large scale assets with a long useful economic life (such as an aircraft or ship). The finance can either be for the financing of a single, particular asset or for an entire portfolio of assets.

A key characteristic of an asset finance transaction is that the asset itself which is being financed will be the primary security provided to the financier. The revenue provided through the use of the asset will repay the debt and service the interest payments.

Practitioners advising on asset finance transactions may act for the owner of an asset (the lessor), the user of the asset (the lessee), the financiers, the manufacturers or the operators.

There are two principal types

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Jurisdiction(s):
United Kingdom
Key definition:
Asset definition
What does Asset mean?

(1) Any item of value; (2) The holdings of a fund, which may include stocks, shares, fixed-interest securities or cash; (3) The main types of investment available: bonds, equities, real estate, commodities etc.

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