Asset financing is lending which enables you to release funds from your company’s balance sheet assets, including investments, accounts receivable, inventory of stock or even machinery that the company owns.
An ‘asset’ can be just about anything within a business, whether it’s computer equipment or even raw material for a manufacturing company or a haulage company’s fleet of trucks — and with an extensive choice of different lenders, you can bet your bottom dollar you’ll be applicable for asset finance for almost anything.
When utilising asset finance, you must offer the lender with security over the assets in question. Asset finance is normally quick and differs greatly from traditional financing.
Asset financing is utilised when a company requires a cash injection or extra working capital in the short term. In most scenarios, the company using asset financing pledges its accounts receivable as added security.
Paying large sums of cash up front for brand new machinery, equipment or raw materials can be rather expensive, and could be a dicey move that causes problems with your companies cash flow. Many companies just don’t have the funds for large purchases — that’s where asset finance can assist.
Asset Financing can give you elasticity and control over your finances, this can ensure your business gets the assets that it requires to flourish, without the huge upfront price tag.
Key benefits of asset financing:
- Solutions are tailored towards your businesses needs
- Easier to obtain than traditional bank loans
- Finance can be spread from 1 to 5 years
- No security required – the security is in the asset
- Return on investment/breakeven point achieved quicker
- Preserve present banking lines
- Retain working cash flow
Types of Asset Finance:
Hire purchase – purchase your asset and spread the cost over a period of your choice!
Equipment leasing – a specific lender buys your required asset and leases it to you at a fraction of the purchase price however the asset won’t belong to the company
Finance / Capital leases – a lease designed for the life of the asset, possibility to offset rental against profit and reclaim VAT.
Operating lease – a lease which allows you utilise the required asset for part of its working life, the leasing company is likely to take back the asset after a fixed contractual period.
Here at Rainstone Financial Services, we are an independent commercial mortgage broker, our affiliation is with no one lender, our advice is based on your needs. Before we speak to any lenders will we fully understand your situation and based upon that we will secure the best possible products, at the best possible rates. Our headquarters are located in London and Essex.
Give us a call on 0333 339 0038 and one of our experts will carefully assess your circumstances.