Asset finance glossary
Asset Finance Glossary
Balloon Payment
A balloon payment is a lump sum due at the end of a loan term.
Chattel Mortgage
Chattel mortgage – A loan that is secured by the asset you purchase.
Commercial Hire Purchase
Commercial hire purchase – Pay for the asset in installments and own it later.
Comparison Rate
A comparison rate includes both the interest rate and most loan fees, giving you a clearer idea of the true cost of a loan.
Establishment Fee
An establishment fee is a one-off charge you pay to set up a business loan.
Finance Lease
A finance lease lets your business use an asset like a vehicle or equipment long-term with the option to take ownership at the end of the lease by paying a residual.
Fixed Interest Rate
A fixed interest rate stays the same for the length of your loan term.
Full Doc Loan
A full doc loan is a business loan that requires complete financial documents.
Low Doc Loan
A low doc loan is requires fewer documents than a full loan application.
Offer of Credit
An offer of credit is a formal document from a lender confirming they’ve approved your loan and outlining the terms and conditions.
Operating Lease
An operating lease lets your business rent a vehicle, tool, or piece of equipment for a set time without buying it.
Residual Value
Residual value is the amount still owed at the end of a finance term.
Secured Car Loan
A secured car loan is a type of car finance where the lender holds the car as collateral until the loan is fully repaid.
Unsecured Car Loan
An unsecured loan is where the lender doesn’t require you to offer an asset as security.