Asset Finance is an alternative form of financing that enables businesses to acquire movable, semi-movable, or immovable assets. The asset constitutes the primary security for financing. This enables the business to acquire an asset at the current market price without committing its valuable working capital.
Product Purpose
Facilitating businesses to acquire productive assets such as factory plants and machinery, heavy-duty equipment, mechanical equipment, tools, and motor vehicles for business use. The product is most suited to businesses that lack collateral security in the form of land and property and would prefer to use the funded assets as the main security for the financing.
Asset types Financed
Fundable assets include: -
• Plant and machinery.
• Printing equipment.
• Generators.
• Motor Vehicles (for the company’s use)
• Marine Transport Vehicles
• Earth Moving and Mining equipment.
• Solar Equipment and accessories.
• Other items classified as moveable/Semi-movable
assets at the discretion of the Bank.
Key Product Features
The financed asset serves as primary security, in which case, the borrower contributes between 10-20% and the Bank can avail funding between 80% to 90% of the cost of the asset. Additional collateral may be required depending on the nature of the asset to be funded.
Tenure
Tenure ranges from 2 to a maximum of 8 years, inclusive of a grace period of up to 3 years. The tenure and grace period depend on the asset’s useful life and the implementation timelines, respectively.
