Asset Finance
Borrowing to purchase specific assets (equipment, vehicles, property).
Real World
A small construction firm might use asset finance to acquire a £120,000 JCB excavator, spreading payments over five years so the equipment generates revenue before it is fully paid for.
Exam Focus
When 'evaluating' finance options, state that asset finance preserves working capital but the asset may serve as collateral, increasing risk.
How well did you know this?