Business assets are valuable items that your company owns. They can include tangible assets, like physical equipment, tools or vehicles. And intangible assets, such as a strong brand or intellectual property. Other types of assets in business can include current, non-current and fixed items. 

Assets help keep your daily business operations running smoothly and play a crucial role in business expansion. For instance, investing in new equipment or technology can enable your company to develop and offer new products or services. Because of their value, these assets are recorded on your balance sheet.

Current assets

Current assets are items owned by a business that it plans to sell or use within 12 months. For this reason, they’re easily convertible into cash.

Examples of current assets include products awaiting sale, and cash in a company’s bank account. They may also include accounts receivable – money owed to the firm by its customers.

Keeping on top of these short-term assets can help business owners to maintain liquidity and smooth day-to-day operations.

Terms: Security, guarantees or indemnities may be required. Product fees may apply. Finance subject to status and is only available for business purposes except where specifically indicated to the contrary. Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it. 

Non-current assets

Non-current assets are all about the bigger picture. Unlike current assets, they won’t be sold or converted into cash within a year. Instead, it may take some time for their value to rise.

They can help a business to invest and plan for the long term while signposting its overall direction of travel. Examples include property, land, natural resources and financial investments.

Fixed assets

Fixed assets fall under the umbrella of non-current assets. They refer to physical equipment, machinery or property that a business plans to use – and hold on to – for more than a year. Buildings, vehicles and IT equipment are just a few examples of these long-term assets.

It’s important to note that over time, the value of fixed assets may depreciate due to wear and tear.

Tangible and intangible assets

Current and non-current assets aren’t the only ways to categorise different items. You can also separate assets into physical and non-physical groups.

Tangible assets

There are measurable items that you can reach out and touch such as:

• Cash
• Warehouse stock
• Raw materials
• Office space
• Company cars 

Tangible assets can be the foundations of a business, supporting daily operations and helping to generate income.

Intangible assets

These assets are different. They don’t have a physical form and are trickier to value. Examples include:

• Intellectual property
• Trademarks
• Patents
• Goodwill towards a company’s brand

These assets serve an important commercial purpose but have no shape or structure.

Effective asset management could help a business to:

• Boost operational efficiency. For example, keeping track of equipment can maximise what you already have, preventing unnecessary purchases.
• Make cost savings. Monitoring machinery, software and vehicles should give you a better idea of when assets need care and attention. This might cut spending on replacement items.
• Reduce compliance risks. Careful asset management can help you to monitor the status of sensitive items closely. For example, when insurance policies are due to run out, or when a computer requires a system upgrade.
• Create accurate reports and forecasts. Reviewing existing assets can make long-term planning simpler. You can also show your company’s worth by including assets on the balance sheet.

Asset finance is a way for businesses to access essential machinery, equipment or vehicles – without large upfront costs.

Instead of buying items outright, asset finance helps you to spread the costs over months or years. This is done by paying a deposit, followed by regular instalments and interest.

The benefit of asset finance is it can stop you from waiting around for the latest equipment. You can often access the kit straight away, gradually paying it off as you go along.

It could also help you avoid a cash flow squeeze since you won’t need to tie lots of money up in a big one-off purchase.

Lombard offers a variety of asset finance options to support UK businesses and help them grow. Explore all our asset finance solutions.

Yes. There’s no one-size-fits-all when it comes to asset finance. Here are some of the main options that business owners can consider.

Hire purchase

Hire purchase gives you the chance to pay for expensive assets over a year or longer. You can put down a deposit and agree to make regular payments, including interest, for a set period. During this time, you’ll be hiring the item, rather than owning it. 

At the end of your agreement, you might have the option to own the asset outright by making a final one-off payment.

Learn more about hire purchase

Leasing

Leasing is a form of rental agreement. It gives you immediate access to an asset. But you’ll need to keep up with regular rental payments for a certain period.

There are different types of leasing agreements, including:

• Operating leases. These agreements often allow you the choice of returning, replacing, or continuing to rent the asset once your term ends. Due to a residual value invested in the asset, you may pay back less over the term than the actual cost of the asset.
• Finance leases. These agreements do not involve any residual value investment. As a result, you will pay back more than the cost of the asset over the term.

Please note, under a lease agreement, you can never take ownership of the asset.

Find out more about our Residual Value Lease. Alternatively, discover all our finance leasing options.

Business contract hire

Contract hire offers businesses a flexible way to lease cars or vans. It’s simply a case of making an advance rental payment, followed by regular instalments. You can then hand the vehicle back once your term ends.

You can choose how long you want to rent the vehicle for, plus an annual mileage limit. Once again, it’s all about avoiding the large upfront costs of vehicle ownership.

See how contract hire works