Asset Finance

Getting your first small business loan is a major milestone. But so is going through the application process! From making the decision to seek financing to putting together a small business loan application.

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Purchasing expensive machinery or other equipment that is vital to growing or maintaining your business is a challenging task, especially for SME’s with tight cash flows.

So it is not surprising that using asset finance as a means to obtaining essential equipment instead of purchasing it outright is one of the fastest growing trends in business finance.

01 How Does Asset Finance Work?
Much depends on the value and useful life of the asset, however the lenders will look at your business model to see how the necessary repayments will be maintained whilst taking into account payment of all other liabilities. We may recommend other means of finance as a solution depending on the nature of your business as well as current and future market trends.
Don’t worry if you have experienced problems with your bank or other high street lenders. We will assess your situation to establish how you can obtain the equipment or machinery that is vital to your business.

If your business lacks three years annual accounts, we will look at the asset itself as the principal source of repayment.

02 Who Is Asset Finance For?
Many businesses have to keep investing in equipment and machinery in order to maintain their clients or for reasons relating to regulatory requirements. Small businesses especially have tight budgets so purchasing equipment outright can be challenging to maintain a healthy cash flow.

Asset finance can provide a perfect solution for your business needs without causing unnecessary cash flow issues. It can provide an ideal platform for small businesses to grow without compromising the day to day needs of the business.

03 Asset Refinancing
You may already own all the equipment your business needs, but often businesses experience difficult times and need to raise cash to get through quiet periods. Asset refinancing can release cash for your business by using your equipment as security for an agreed repayment of the monies loaned to your business.

We will assess the value of your machinery or equipment to establish how much your business can borrow as well as the ability for it to manage the repayments should the finance be granted. Our specially trained staff will be able to establish the most appropriate solution that is in the best interest of your business.

04 What Are The Disadvantages Of Asset Finance?
Asset finance agreements are typically structured over a fixed term. In certain instances it will not be feasible to terminate the contract prematurely as there could be penalties making it an expensive option.

The total cost of repayments that you would pay back on your asset finance will be higher than the cost of buying the asset outright.

Some assets may also require further security and this can be dependent on your company’s financial position. This also may reflect on your company’s credit rating as a negative.

05 What Are The Benefits Of Asset Finance?
The asset finance is held to be an operating lease, so this is classed as an expense rather than a debt, therefor it will not affect your company’s credit rating negatively.

As the regular lease payments are small this allows for the business to free up essential cash-flow.

As you will be paying a fixed monthly amount over a defined period of time this will enable a clearer budget management within your business.