
What is Asset Financing?
Asset financing is a funding solution that enables businesses to obtain the equipment, machinery, vehicles, or technology they need to operate and grow without needing to pay upfront. Instead of tying up working capital, businesses pay for the asset over time, typically in monthly instalments.
It’s especially valuable for small and medium-sized enterprises (SMEs) seeking to preserve cash flow while staying competitive and scaling operations.
🔗 Related: Best Small Business Loans in Australia
Types of Asset Financing
Not all asset financing is created equal. Here’s a breakdown of the key types, with pros and cons of each to help you decide which option suits your business best.
Hire Purchase (HP)
Definition: You hire the asset and pay in instalments. Ownership transfers at the end of the term.
Pros | Cons |
---|---|
Eventual ownership of the asset | Depreciation risk lies with you |
Fixed monthly costs | Initial deposit often required |
Simple structure | Less flexibility if asset becomes obsolete |
Finance Lease
Definition: You lease the asset and use it, but ownership stays with the lender. At term-end, you may sell or extend lease.
Pros | Cons |
---|---|
Low upfront cost | No ownership |
Tax-deductible lease payments | Responsible for maintenance |
Ideal for fast-depreciating assets | Higher total cost vs buying outright |
Operating Lease
Definition: Short-term rental of assets with no intention of ownership.
Pros | Cons |
---|---|
Off-balance-sheet finance | No asset ownership |
Ideal for temporary equipment use | Potential for higher ongoing costs |
Less maintenance responsibility | May be more expensive long term |
Asset Refinance
Definition: Use existing assets as collateral to unlock working capital.
Pros | Cons |
---|---|
Immediate cash injection | Risk of asset repossession |
Useful for improving liquidity | Interest charges and fees may apply |
Can be used multiple times | Asset must be unencumbered and valuable |
Cloudfloat’s Pay Later Model (Smart Asset Finance)
Definition: Cloudfloat pays your invoice now; you repay over 30, 60 or 90 days for a low fixed fee.
Pros | Cons |
---|---|
Instant access to asset with no upfront cost | Limited to Australian businesses |
No personal guarantees or complex paperwork | Only works with valid invoices |
Improves supplier relationships and credit | Asset not tied to long-term lease |
Flexible repayment (30–90 days) | Not a fit for long-term large asset acquisitions |
🔗 Related: What Is Invoice Financing? Is It a Real Alternative?
How Does Asset Financing Work?
Choose an asset you need for your business (e.g., new machinery or tech).
Select a financing provider such as Cloudfloat.
Get approved based on the asset type, business health, and repayment capacity.
Sign an agreement outlining terms, including repayment period and ownership conditions.
Receive the asset, and start using it immediately.
Repay over time through structured instalments or flexible payment options.
Cloudfloat simplifies this entire process by paying the invoice for the asset directly to the supplier and allowing you to repay it later.
Benefits of Asset Financing

Preserve Working Capital
Keep your cash where it’s needed most—like marketing, hiring, or inventory.
Accelerate Growth
Access the tools and equipment you need now, not months from now.
Reduce Upfront Costs
Skip the massive down payments; pay manageable instalments instead.
Improve Supplier Relationships
Pay suppliers on time while managing your own cash flow.
Tax Benefits
Lease payments and depreciation (in some cases) may be tax-deductible.
Cash Flow Certainty
Cloudfloat offers fixed, low-fee repayments, so you’re never caught off guard.
Who Can Benefit from Asset Financing?
🏗️ Construction Company Buying New Equipment
Scenario: A mid-sized construction firm lands a major project but needs a new excavator and site trailer.
Problem: The upfront cost is over $80,000, which would seriously dent cash flow.
Solution with Asset Financing:
They use hire purchase or equipment leasing to acquire the gear, paying in monthly instalments while using the equipment to deliver the job.
Cloudfloat Layer: For ancillary costs like tools, safety equipment, and fuel invoices, they upload the invoice and pay it over 60 days freeing up cash to pay their workforce on time.
🧰 Tradie (Electrician) Upgrading Their Van & Tools
Scenario: A solo electrician wins a high-value commercial contract and needs a vehicle upgrade, plus new ladders and testing kits.
Problem: Cash is tied up in unpaid invoices from previous jobs.
Solution with Asset Financing:
They lease a new work van and spread the tool costs using Cloudfloat’s “Pay Later” on supplier invoices, selecting 90 days to repay.
Result: They meet the contract requirements without touching their working capital.
🛍️ Retailer Launching a Pop-Up Store
Scenario: An online fashion brand is invited to host a seasonal pop-up in a shopping centre.
Problem: They need to invest in fittings, signage, and POS systems quickly but their capital is tied up in inventory.
Solution with Asset Financing:
They use an operating lease for the POS tech and Cloudfloat to pay the fit-out suppliers over 60 days.
Result: The pop-up opens fast, generates new sales, and the business doesn’t feel the cash crunch.
🏥 Dental Clinic Investing in New Equipment
Scenario: A growing dental practice wants to install a new 3D imaging machine to improve patient care.
Problem: The equipment costs $50,000+, and financing from traditional banks is slow and full of paperwork.
Solution with Asset Financing:
They choose a finance lease with a specialist medical finance provider and use Cloudfloat to manage upfront supplier invoices for installation and training.
Result: New patients can be onboarded faster, and revenue grows while repayments are spread over time.
🍽️ Hospitality Business Refurbishing Their Kitchen
Scenario: A family-run café wants to expand its kitchen and add delivery capacity ahead of a busy season.
Problem: Builders and suppliers want deposits upfront, but the café can’t risk draining reserves.
Solution with Asset Financing:
They refinance existing kitchen equipment to free up capital and use Cloudfloat to defer payments on supplier invoices for tiles, appliances, and plumbing.
Result: They launch in time for the summer rush without touching their emergency fund.
💻 Creative Agency Investing in Tech Upgrades
Scenario: A digital agency needs to buy high-performance computers and camera gear for a big client pitch.
Problem: Paying upfront would delay salaries and cash out their buffer.
Solution with Asset Financing:
They lease the equipment and use Cloudfloat to split the cost of invoices for office setup and software over 30–60 days.
Result: The pitch is delivered on time with upgraded capabilities and the agency wins the client.
🔗 Related: Top Fintech Platforms Offering SME Loans
How to Choose the Right Asset Financing Option

Here’s a step-by-step guide:
Assess your cash flow needs
Are you looking for long-term ownership or short-term usage?Compare asset lifespan with financing term
Match lease length with how long you’ll use the asset.Evaluate tax and accounting impacts
Some financing options affect your balance sheet and tax position.Use Cloudfloat if...
You have a valid invoice.
You want flexibility and speed.
You prefer short-term repayment over leasing.
Apply online
Cloudfloat’s approval process is fast and paperless.
Ready to Finance Your Next Asset Without the Cash Flow Stress?
Get started with Cloudfloat today. Upload your invoice and choose to pay over 30, 60, or 90 days with zero fuss and zero hidden fees.
FAQs
What assets can be used for financing?
Anything from equipment, vehicles, and technology to furniture and heavy machinery. Cloudfloat focuses on invoices so if your supplier issues one, we can help.
What is the difference between asset financing and a loan?
Asset Financing: Tied directly to the asset; you pay for usage or ownership gradually.
Loan: You receive a lump sum of money and decide how to use it.
Is Cloudfloat the same as leasing?
No. With Cloudfloat, your business pays invoices over time. It's not a lease, it’s short-term, flexible invoice-based finance with a flat fee.
Do I need collateral for asset financing?
Not always. Many asset finance options are “self-secured” by the asset itself. Cloudfloat doesn’t require collateral or personal guarantees.
How long does approval take?
With Cloudfloat, approval can happen in minutes once you’re verified.
👉 Explore Cloudfloat’s flexible financing options today.