What does the term hard assets mean when talking asset finance in the UK?
In the context of asset finance in the UK, the term "hard assets" refers to tangible physical assets that have intrinsic value and can be used as collateral for a loan or financing arrangement.
Hard assets typically include items such as machinery, equipment, vehicles, real estate, and other physical assets.
When a business or individual requires financing for acquiring or expanding their hard assets, they can use these assets as collateral to secure the loan.
In case of default or non-payment, the lender may have the right to seize and sell the hard assets to recover their funds.
These items are referred to as hard assets because they are physical, tangible objects that have value and can be owned and used for various purposes.
Here's a breakdown of why each category of items you mentioned is considered a hard asset:
HGVs (Heavy Goods Vehicles) & Trailers
These are large vehicles designed to transport heavy loads.
They are considered hard assets because they are physical vehicles that have a significant value and can be used for commercial purposes, such as transporting goods or equipment.
Yellow Plant & Construction Equipment
Yellow plant refers to heavy machinery used in construction and engineering projects, typically painted yellow.
This includes equipment like excavators, bulldozers, loaders, and cranes.
These machines are considered hard assets because they are physical and valuable tools used in construction and infrastructure development.
Materials Handling
Materials handling equipment refers to machinery used for moving, storing, and controlling materials in manufacturing, warehousing, and logistics operations.
Examples include forklifts, pallet jacks, and conveyor systems. These items are considered hard assets because they are physical equipment used for industrial purposes.
Cranes - Mobile/Crawler
Cranes are specialised machines used for lifting and moving heavy objects.
Mobile cranes are mounted on trucks or trailers and can be transported to different locations, while crawler cranes move on tracks.
Both types are physical assets that have significant value and are used in construction, engineering, and other heavy lifting applications.
Cars (high-end, classics & black cabs)
Cars, especially high-end and classic vehicles, are considered hard assets because they are valuable physical objects.
These cars often have appreciating value over time, and they can be collected, traded, or used for luxury transportation services like chauffeur-driven vehicles or black cabs (taxis).
Manufacturing Equipment
Manufacturing equipment refers to machinery used in production processes, such as assembly lines, machining tools, and specialised equipment for various industries.
These machines are considered hard assets because they are physical equipment used for manufacturing goods.
Motorhomes & Horseboxes
Motorhomes are recreational vehicles equipped with living spaces, amenities, and sleeping accommodations.
Horseboxes, on the other hand, are vehicles designed to transport horses safely.
Both motorhomes and horseboxes are considered hard assets because they are physical vehicles that provide specific functionalities and have value.
LCVs (Light Commercial Vehicles)
LCVs are small to medium-sized commercial vehicles used for transporting goods or providing services.
Examples include vans, pickup trucks, and small cargo trucks. LCVs are considered hard assets because they are physical vehicles used for commercial purposes.
Coaches, Buses & Minibuses
Coaches, buses, and minibuses are vehicles designed for transporting a large number of passengers.
Coaches are typically used for long-distance travel, while buses and minibuses are used for shorter routes or private transportation.
These vehicles are considered hard assets because they are physical vehicles used for public transportation or private hire services.
Engineering Equipment
Engineering equipment refers to machinery, tools, and devices used in various engineering disciplines, such as civil engineering, mechanical engineering, or electrical engineering.
This can include equipment like surveying instruments, testing equipment, or specialised tools.
Engineering equipment is considered a hard asset because it is physical equipment used for engineering and technical purposes.
Modular Buildings
Modular buildings are prefabricated structures constructed off-site in modules and then assembled on-site. They are used for a variety of purposes, such as offices, classrooms, housing, or healthcare facilities.
Modular buildings are considered hard assets because they are physical structures with value and can be used for different applications.
Portacabins/Welfare Units
Portacabins, also known as portable cabins or site cabins, are temporary structures used as offices, restrooms, or welfare facilities in construction sites, events, or other temporary locations.
Portacabins and welfare units are considered hard assets because they are physical structures that provide functional spaces and can be moved as needed.
Waste & Recycling Equipment
Waste and recycling equipment refers to machinery and equipment used in waste management and recycling processes.
This can include equipment like waste compactors, recycling machines, shredders, or sorting systems.
Waste and recycling equipment is considered hard assets because they are physical machinery used in waste management operations.
Agricultural & Forestry Equipment
Agricultural and forestry equipment includes machinery used in farming, forestry, and related activities.
This can include tractors, harvesters, ploughs, chainsaws, and other specialised equipment.
Agricultural and forestry equipment is considered hard assets because they are physical machinery used in agricultural and forestry operations.
Print Equipment - up to £50,000
Print equipment refers to machinery and devices used in the printing industry, such as printers, presses, copiers, or finishing equipment.
Print equipment with a value up to £50,000 is considered a hard asset because it is physical machinery used in printing processes.
These items are all classified as hard assets because they are physical objects that have value and can be owned and used for specific purposes in their respective industries.