Asset finance vs term loan
Asset finance vs term loan: which should your business use?
Asset finance vs a business term loan compared: security, amount, tenor, cash flow and tax treatment. When to fund equipment with asset finance and when a term loan is better.
Both put capital to work, but they are built differently. Asset finance is secured on the specific equipment, vehicles or plant being bought; a term loan is a lump sum for broader purposes, secured or unsecured, repaid over a fixed schedule.
Picking the right one affects how much you can raise, how long you repay and what stays unencumbered on your balance sheet.
| Feature | Asset finance | Term loan |
|---|---|---|
| Security | The financed asset | Business assets, guarantee — or none (unsecured) |
| Amount | Up to 100% of asset value, from USD 50,000 | From USD 50,000; unsecured up to USD 1M |
| Use of funds | Specific equipment, vehicles, plant | Any business purpose |
| Repayment | Matched to asset life; seasonal/balloon options | Fixed amortising schedule |
| Speed (under USD 10M) | Typically closes in less than 14 days | Typically closes in less than 14 days |
Rule of thumb
- Buying identifiable, resaleable equipment → asset finance usually raises more, for longer, at lower cost
- Funding hiring, inventory, acquisition or mixed uses → term loan
- No assets to pledge → unsecured term loan
- Both → combine an asset facility with a smaller working-capital line
Cash-flow fit
Asset finance can match repayments to the asset's useful life and include seasonal or balloon profiles. Term loans typically amortise evenly; unsecured term loans usually have shorter tenors.
Tax and accounting
Treatment of interest, depreciation and leases differs by jurisdiction — confirm with your accountant before choosing a structure.
Next steps: check the eligibility checker, review indicative rates, run the calculator or apply. Prefer to talk? Call +1 (302) 579-5439 or book a deal officer.
Indicative information only; not an offer of credit. All facilities are subject to credit approval, KYC and documentation.
People also ask
Is asset finance cheaper than a term loan?
Often, because the lender has security in a resaleable asset. Indicative ranges for both are on the Westford rate sheet; your term sheet sets the final price.
Can I use a term loan to buy equipment?
Yes, but asset finance usually offers a higher advance and longer tenor for the same equipment, leaving other assets free.
Can I combine asset finance and a working-capital line?
Yes — many borrowers fund equipment with asset finance and keep a revolving line for operating cash needs.
How fast can either close?
For facilities under USD 10 million with complete documents, Westford typically closes in less than 14 days. Larger or project-level facilities follow a diligence timetable agreed up front.
USD 1M+ facilities
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