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    So as I understand it asset financing is just a method for companies to borrow money for various projects and secure it against their assets be it their future earnings, property, IP etc ... is this correct?

    If so then does that mean lease financing is where a company rents equipment from a supplier? So a company rents a computer system for 5 years and after the 5 years the owner just sells the system for its current value? Does this also come under asset finance?

    Now the biggie ... companies like CHP offer a software product that deals with asset finance ... how? Does this product allow a company to secure finance instead of having to call up a provider and request a quote? and then does it manage payments and interest rates?

    Thank you for your help.
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    (Original post by Carlo08)
    So as I understand it asset financing is just a method for companies to borrow money for various projects and secure it against their assets be it their future earnings, property, IP etc ... is this correct?

    If so then does that mean lease financing is where a company rents equipment from a supplier? So a company rents a computer system for 5 years and after the 5 years the owner just sells the system for its current value? Does this also come under asset finance?

    Now the biggie ... companies like CHP offer a software product that deals with asset finance ... how? Does this product allow a company to secure finance instead of having to call up a provider and request a quote? and then does it manage payments and interest rates?

    Thank you for your help.
    Not an expert on the topic, but what I understand is this. Sometimes people trying and distinguish between financing back by collateral and asset financing - conceptually I can see why you might want to make this distinction but I'm not sure it's that easy. When you borrow to buy, and use the asset you intend to buy as collateral, that's not usually considered asset financing. Using property, inventory or receivables (less likely IP) that you already own as collateral would then be asset financing. Another common asset financing is a hire purchase - creditor buys the asset on your behalf and ownership is transferred on repayment on the principal or as otherwise agreed.

    Hire purchases are basically leases with a change in ownership clause, hence you can think of leases as being a part of asset finance even though you're receiving the use of facilities instead of cash. Be sure to distinguish between operating leases and finance leases, and know the difference in accounting treatments.

    A cursory glance and CHP website suggests they might offer software /services that manage the process of offering collateral (due diligence, appraisals, general workflow & payments sort of thing) - but not completely sure.
 
 
 
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