The asset finance market continues to grow as business owners wake up to the benefits this form of lending. So why should your business consider asset-based finance and what benefits can it offer over traditional forms of lending?
One of the major benefits of asset finance is that it not only provides finance for a business, it also helps fund the equipment needed to expand or improve productivity.
One of the major hurdles for owners of startups and small businesses is having enough finance to scale up their operations. Equipment is generally expensive and if this equipment is purchased it often takes vital funds away from other areas of the business.
Spreading the cost of this equipment using asset finance is business friendly because it allows assets to be used to generate income freeing up cash to be used in other areas of business development.
Asset finance is provided by specialist asset finance companies and the process is often fast and straightforward. While banks will be demanding in the amount of information, they need due to the risks involved with traditional lending, the risks with asset finance are lower reducing the time it takes to put the funds in place.
To summarise, asset finance companies offer an attractive alternative to traditional lending by using assets to free up and maintain cashflow allowing business owners to expand and improve their operations.
Starting a business from scratch is tough and the odds can be stacked against you if you don’t have enough investment capital to plough into the business at an early stage. Taking a loan, however, is also a major step which is why we have put together this guide to see if your startup is ready for a loan.
Do you have a business plan ready?
Having a business plan written down is a crucial step towards getting business finance. Lenders are going to want to see that you are serious about your business and a business plan indicates to them that you have took the time to develop your business and you have a clear pathway towards growing it.
Can you prove there is demand for your product or service?
Having a business idea and putting it into a plan is one thing but testing it out in the real market place is quite another. It will strengthen your case significantly if you can provide some data on real sales made and that your business idea works.
Finally, do you know what you need a loan for?
Applying for a business loan without any idea what it is for will almost certainly end in a failed application. Finance providers will be looking for some assurance over what the money will be used for.
The construction industry is a varied and complex business particularly on large development projects where there will be a number of parties involved. From developers to builders and investors each will have a role to play before a project reaches completion and everyone can benefit from the return on investment. With this in mind here are some of the key considerations when seeking construction finance and how specialist finance for the sector can help.
Construction finance can save time
Getting a development project off the ground often requires investors to finance 75% of the development cost. This can delay projects while investors are sought to meet this cost. Construction finance brokers can help secure the best rates and find suitable lenders.
Construction finance can help meet upfront payments
Construction companies will normally demand upfront payments before starting work on a project. This means developers will need the funds to pay them. These funds will come from investors but often to make investments more attractive, payments are staged. Construction finance can help with construction costs and plug any gaps in funding.
Construction companies can overcome cashflow challenges
The main challenges for construction companies are paying for raw materials and their workers. If a project is late being delivered and payment terms include a lump sum payment on completion this can mean delays to the final payment putting the business at risk. Construction finance can help reduce this risk and cover upfront costs.