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The Financial Conduct Authority (FCA) announced on 11 January 2024 that a review will be conducted

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Is Soft Asset finance being underutilised by UK businesses?

19th January 2022

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Many UK businesses make use of the benefits that asset finance can provide when purchasing machinery, vehicles, and big-ticket equipment, but this does not seem to be the case for soft asset finance, so we look at the reason why, and how soft asset financing can help businesses.

What are soft assets?

Soft assets can typically include IT hardware and software, security equipment and furniture and fittings – assets that are essential to the fabric of the business and key to its successful management and organisation.

What’s the difference between hard assets and soft assets?

Soft assets are those generally differentiated from hard assets such as plant and machinery, vehicles, and commercial property, but which typically have little or no resale value. Soft assets can sometimes include intangible assets as well. This may be a brand, a specific team member’s knowledge, or cloud storage. Though many people may think that these kinds of intangible assets cannot be financed, some intangible assets can be. These are usually assets that are not physical but are still required for the successful management of your business.

Those assets that are both tangible and intangible are becoming an increasingly important cog in modern offices where the smooth running of day-to-day management depends on the reliability of your communication systems, the speed of your software, and the dependability of your hardware.

Soft Asset Finance by numbers

Statistics from the Finance and Leasing Association show that in the 12 months to the end of November 2021, its members provided finance for £1.8 million worth of IT equipment, and while this may seem like a lot, especially considering the current pandemic, this figure is 29% lower than the previous year.

At the same time, commercial vehicle finance and plant and machinery finance grew by 20% and 22% respectively compared to the previous 12 months.

In addition to these figures, a quick check on Google shows that search engine enquiries for “soft asset finance” is approximately 30 per month, versus “asset finance” which has 2.8K searches per month.

These figures suggest that UK businesses are aware of and utilising asset finance to purchase big-ticket equipment, but the utilisation of soft asset finance is not so popular.

Why the reduction in soft asset financing?

The most obvious reason is undoubtedly the covid pandemic. With many businesses having to adopt home or hybrid working, traditionally financed office equipment such as photocopiers and phone systems have been in lower demand.

Alongside that, hospitality and leisure businesses who would usually finance catering equipment, Epos systems or even gym equipment have had a very challenging 2 years, and there will be some hesitation about investing until the end of the pandemic is in sight.

While it is completely understandable that businesses are nervous to invest during the current pandemic, soft asset finance could be a manageable way for businesses to grow.

Benefits of Soft asset finance

As with traditional asset finance, the benefits to businesses include:


Asset finance provides you with a regular payment plan that minimises the impact on your working capital and cash flow.


Asset finance covers a broad spectrum of financing and re-financing options that can be chosen according to your requirements.


Affordable assets and business equipment can speed up processes and efficiency of your business, enabling your business to grow sustainably.

Leasing computer hardware and software

FLA figures suggest IT equipment is one of the most common forms of soft assets to be financed. But while hardware finance has become relatively commonplace, particularly via leasing, software finance is rather less widespread.

This is not because software funding isn’t a viable option for businesses, but rather because many businesses are not aware that they can lease their preferred applications in the same way that they might lease PCs, printers, and other office equipment.

What are the benefits of leasing computer hardware and software?

Businesses that finance their more essential applications, rather than buy them, benefit in several distinct ways.

The principal benefit of software finance is, unsurprisingly, cost. Enterprise software can be prohibitively expensive for a small business, but it can also bring a significant competitive advantage.

A company that uses accounting software is usually better equipped to manage its finances than a company that relies on Excel spreadsheets. But benefiting from these programs will often require initial outlay. If a business can’t afford it, then it can’t take advantage of it. That’s where ‘soft’ asset finance can play a part in the procurement of useful software for your business.

With software and hardware finance, a business can more easily spread payments across monthly instalments, making it easier to pay for software without compromising on quality with a lesser or older version. If the business needs to upgrade or scale, the finance agreement can be amended to meet their evolving requirements.

A finance agreement can be tailored to the exact needs of the customer and include both tangible assets, such as PCs and laptops, and intangible assets, such as support, cloud storage or, communications.

Software funding is also well-suited to changes in requirements, as businesses scale up and their needs grow or change. It’s also easy to avoid the problem of built-in obsolescence that comes with software and hardware alike.

Leasing IT hardware and software allows businesses to keep pace with the latest versions, iterations, and upgrades. This means they never have to worry about their equipment or their software becoming slow or ineffective over the long term as they’re seldom very far from a high-quality replacement.

Given the pace of development, particularly with software, this is an important consideration for businesses that need access to state-of-the-art technology to keep up with the competition.

Other examples of soft assets that can be funded via finance are:

  • Reprographics/Printing
  • Telecoms
  • Catering Equipment
  • Gym & Leisure Equipment
  • Garage Equipment
  • Epos Equipment
  • Vending
  • Recycling Equipment
  • Medical Equipment
  • Audio Visual Equipment

How can soft assets be financed?

For a business where cash flow is an issue or where there is a desire to spread the cost of acquiring assets over time, asset finance is the answer to cover the cost of acquiring the required soft assets.

With only a small payment upfront and easy-to-manage payments on a regular basis, financing soft assets can be a simple, cash-flow friendly solution that ensures a business has the vital tools for the job that it needs.

There are various forms of finance agreements available, and the best solution will depend on the individual objectives of the business.

At Anglo Scottish Asset Finance, our aim will always be to provide the business with an asset finance solution that is most cost-effective in meeting its needs and thus helping it reach its full potential. Our approach with soft assets is no different – read more about soft asset finance.

If you would like more information on your options, then please get in touch with Anglo Scottish Asset Finance today.

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