finance jargon

Everyday finance jargon – what does it mean?

Like a lot of people who are not familiar with leasing, some of the terminology used can be a little confusing. In this blog we hope to educate you with some of the most frequently used terms in leasing. So, our everyday finance jargon – what does it mean? Read on to find out more…

Asset finance

The most obvious one would be to explain asset finance. Firstly, an asset is an object or resource that holds value to someone. It can be owned by anyone, however in these instances it is normally owned by a business. It offers purpose to whoever is using it. Asset finance therefore is obtaining an asset for a business through using finance as payment. This allows businesses to spread the cost of an asset over a fixed term instead of paying a larger sum upfront. If you are looking for any asset finance for your scaffolding equipment, or would like to know more information, please contact us.

Credit Score

Credit score is a term used all the time in the leasing and asset finance world. A credit score is a numerical term that is based on several factors. This includes an individual’s credit files, how likely they are to be able to pay back debt and any other credit information. It is usually based on a credit report. It is sometimes known as a credit rating. We use it here at Scaffold Finance to ensure that the company we are arranging finance for is likely to make repayments on time. However, your credit doesn’t have to be perfect to arrange finance. We have a 96% acceptance rate, so never be scared to reach out!

Directors/Personal Guarantees

This is where one or more directors of the company become personally liable for any debts that may come of their finance agreement. So, should they become unable to make their repayments, they are then putting their own personal assets at risk.

Fixed assets

These are normally assets that are long lived and are tangible. It means that they cannot easily be converted into cash. They include assets like property, plant, and machinery. The benefit to having fixed assets is that they are usually owned by you or in your name and are different to current assets. These are assets like cash or bank accounts. They are usually seen to be safer and more protected.

Hire Purchase

A hire purchase is an agreement type that involves using a fixed rate. This is where you can purchase (normally a vehicle) using fixed monthly payments. Depending on the agreement the term and payments will differ. However, in terms of budget it is the most efficient finance way to go. This is because you will know what you are paying for each month. You can also time your cash flow with your payments (more on this below). When the final payment has been made, the asset/vehicle is now yours.

Cash flow

Simply put, cash flow is the movement of money in and out of a business. It’s the total amount being transferred in or out. Some examples of outgoing cash flow are salaries, rent and any utilities. These normally stay roughly the same, however, they can differ from month to month. The time that a cash flow is used for is known as the accounting period. It is also a good indicator of how a business is doing and how it will perform in the future. As a business owner you can see the cash in your business clearly and develop a plan using this.

Contact Us

If you would like more information on our everyday finance jargon, or any other finance needs you may have, then please don’t hesitate to contact us. You can email us on, or alternatively you can call us on 01494 506 383. You can also see more over on our LinkedIn and Instagram pages.

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