Category: Lease Finance (page 1 of 2)

What sorts of asset finance are there?

There are several types of asset finance and a few minor variations. Each has its uses, benefits and disadvantages but all broadly follow the principles of asset finance given above. A general overview of what’s available follows:

Hire purchase

This is a very similar model to hire purchase for individuals. The hire purchase provider retains ownership of the asset to be leased over the term of the agreement and leases it to the business for agreed regular fixed payments. Businesses may make a larger initial payment followed by smaller payments on an agreed schedule. At the end of the agreed period, the business can choose to buy ownership of the item outright with a further payment.

Finance lease (or capital lease)

This differs from some other asset finance in that the business is only ever renting the assets concerned. Again, payment is made with regular payments to an agreed schedule. This normally lasts until the finance provider has recouped the purchase value of the asset. In some instances, the finance company may allow the business to share in a percentage of the sale value of an item once it has been sold. The business does not have the option to purchase the asset outright.

Tax-wise, it may be possible for a business to offset the rental payments against their profits. However, this is not possible with long funding leases. The finance company retains the right to any capital allowances, but the business can reclaim VAT.

Asset refinancing

There are basically two forms of asset refinancing: the first is simply using a company’s assets (physical or otherwise) as security against a loan.

The second – more properly called asset-based lending – is where a business sells an asset to asset finance provider for an agreed lump sum. The business then leases back the asset sold from the finance provider – thus repaying the lump sum paid.

Asset refinancing differs from a simple secured loan in that a business can use physical assets they may only partially own as collateral, but only up to the level of equity they have in that item.

Contract hire

This form of asset financing relates to vehicles only. A business wishing to expand its fleet will approach a contract hire provider who will source the vehicle(s) required. The business pays a regular amount over the agreed leasing period.

Maintenance and servicing costs remain the responsibility of the provider, rather than the business. For larger companies with multiple vehicles fleet management services may also be included in the base contract hire costs.

Contract hire (also sometimes referred to as vehicle asset finance) carries the benefit of relieving a business of the time and budget-consuming tasks that accompany normal vehicle ownership. The provider is responsible for finding and buying a new vehicle, as well as all maintenance and servicing costs. At the end of the leasing period, the provider also assumes responsibility for the disposal of the vehicle.

Farm machinery finance options through Richmond Asset Finance

Richmond Asset Finance are pleased to announce that we offer a wide range of financial payment facilities on most of our new and used tractors and farm machinery.

We offer agricultural and farm machinery finance across the UK. Richmond Asset Finance’s success is reliant on its specialist service and preserving a competitive edge in a very competitive industry. We ensure that our interest rates are monitored regularly so that they remain at the sharp end of the market.

We can provide finance for a wide variety of agricultural assets, from cultivators, tractors and combine harvesters to livestock, robotic milking machines and crop sprayers, and we’ll guide you through every part of the agriculture finance process. 

Having helped thousands of farm owners achieve business growth, we can help you with a tailored flexible agriculture finance funding solution from £10,000 to £500,000. We’ll even take the seasonality of your business into account when tailoring your payment plan.

Speak to one of our specialists today for more information.

Plant & Machinery Financing Solutions from Richmond Asset Finance

The investment in effective agricultural plant machinery is essential for farmers and and contractors within the construction industry, in order to raise working capital and boost growth.

Construction and agricultural refinance releases funding when your business needs it more by advancing cash against uncertified applications for payment or staged invoices, which gives a safety net for finances, meaning businesses are no longer held back from making staff and supplier payments or taking on projects due to delayed payments. This innovative funding solution for the construction industry is sustainable and practical for all involved, providing pre-payments against applications and milestones for sub-contractors in which contracts with customers often create a barrier to traditional financing and refinancing options.

Through our construction finance solutions, our team at Richmond Asset Finance can help ensure your business and farm has a regular cash flow in addition to raising more capital for you to work with, which in turn will make it easier to run your business, pay staff, cover overheads and increase turnover. Not only this, but should you need to purchase new assets to enable the highest standard of service for your customers, construction finance can allow you to do so.

We provide construction finance and refinance for a range of different construction machinery and yellow plant.

Contact us today for more information.

What are the benefits of equipment finance?

There are many reasons you might choose equipment finance rather than paying up front out of your business’s coffers. Here are four of the best:

Tax efficiency

Some types of equipment finance like equipment leasing and sale and leaseback are more tax efficient than buying outright. That’s because when you lease an item it’s a monthly expense rather than an asset sitting on your balance sheet.

Easy to budget and manage

Equipment finance in most of its forms gives you predictable payments so you can spread the cost over time. That means that managing cashflow is that little bit simpler, and you can focus on running the business.

Flexibility and scalability

If you finance one piece of equipment and your business starts growing, you can get more items quickly without a large outlay. Whether you’re ramping up production using a new piece of state-of-the-art kit, or getting hold of extra vehicles for expanding logistics, equipment finance is a great way to grow your business.

Access to other lines of credit

One of the often forgotten but important reasons to finance equipment rather than buy it outright is access to other lines of credit. For similar reasons as tax efficiency, equipment finance is usually a predictable monthly expense, which means you can get another type of business finance alongside it. This is a huge advantage for some businesses — you could get the equipment you need, and take out a business loan for marketing, for example.

Tip for farm crime prevention

When winter is approaching and clocks go back an hour as British Summer Time officially ends, it is a good time for farmers to review their security.

Farms in the autumn and winter months are dark and secluded places and can prove an inviting target for thieves who will be looking to steal farm vehicles, fuel, tools and equipment.

Statistically, October and November are the two months of the year when police receive more reports of burglary than at any other time.

With their isolated countryside locations, farmhouses, outbuildings, barns, garages and sheds are all prey for would-be rural thieves, who use modern technology including drones, Google Earth and sat navs to pinpoint their entry and escape routes.

But there are a variety of measures you can take to protect your property, land and livestock and discourage potential thieves.

Fuel

Fuel thieves often target farms under the cover of darkness when they are able to drain tanks within minutes if they are not properly protected.

Thieves use anything from basic plastic tubes to pumping apparatus to siphon off hundreds of litres of red diesel from tanks and farm machinery, causing huge financial loss and inconvenience for farmers.

Tip

To prevent theft, fit fuel bowsers with wheel clamps or hitch locks. Tanks should be housed in a secure location – within a shed (in line with regulations) or in a compound, such as a locked metal cage.

Consider fitting a remote fuel monitoring gauge and alarm system. Install movement sensors, CCTV and lighting around the tank.

Store machinery inside sheds using layers of security and ensure tractors are locked up at night. If machines must be kept outside, park with fuel caps against a fence or wall.

Lighting and CCTV cameras

Isolated farm buildings down dark lanes are easy for thieves to approach and hide in the darkness. Make sure you light up areas in and around your home and buildings.

Tip

Motion-sensor security lighting and CCTV cameras are a good crime prevention and detection tool. Thieves don’t want to be seen.

Install lighting and CCTV in access locations, vulnerable areas and around the perimeter of farm buildings, yards and houses. Consider audible and monitored intruder alarm systems.

With improving technology in this area and a reduction in the cost of CCTV systems, they can be bought for fairly modest sums. Many suppliers offer subscription services with text alert systems linked to mobile phones, tablets or computers, allowing you to monitor the farm 24/7 from anywhere in the world.

Farmers are embracing new technology involving infrared beams that set off voice warning systems and relay live footage to mobile phones.

Yorkshire Machinery Finance for Farms

From tractors, headers or balers, if it’s part of a working farm Richmond Asset Finance can finance it! At Richmond Asset Finance we have access to an experienced panel of lenders so we can bring you only the best finance options for your farm machinery and business.

Agriculture is very diverse and we also understand that that some farmers have seasonal income, so we can tailor seasonal loan structures for certain applicants if the situation calls for it.

We also understand that a 1998 tractor might still be in good working condition, so older farm machinery can be financed from both private sellers and dealers. Simply ask us for more details.

We can offer agriculture finance loans for the following vehicles and equipment:

  • Tractors
  • Harvesters
  • Spraying Equipment
  • Spreaders
  • Seeders
  • Offset Disc
  • Balers
  • Irrigation
  • Telehandlers

Have farm equipment or machinery that’s not on the list? Call us and we’ll be happy to help: 0113 288 3277

Finance Options

Typical Finance Types, uses and descriptions

1. Farm Finance, Rural Finance

An all embracing term we use to describe all types of farm and agricultural finance we offer in the rural and country business sectors and which can also be described as Agricultural Finance, Equestrian Finance, Farm Finance, Land Finance and Horticultural Finance. Finance can be provided for holiday complexes, caravan parks, caravan sites, properties with agricultural restrictions, land, buildings, working farms, non-working farms, nurseries, garden centres, smallholdings, estates, fisheries, farm shops and generally all types of rural type situations.

2. Agricultural Loan, Loan for Agriculture, Loans for Agriculture

More commonly described as an Agricultural Mortgage, Mortgage for Agriculture, Agricultural Re-mortgage or Re-mortgage for Agriculture being a loan secured by a first charge over property in UK, England. In some cases a loan may be secured by way of a second charge over this type of property.

3. Bridging Loan, Bridging Finance

This is a short-term arrangement whereby a loan is secured either by way of a first charge or second charge on property in England, Wales, Scotland or Northern Ireland. Usually, but not always, interest is rolled up or added to the account so that all the money is repaid by the end of the term, meaning that no monthly payments are made.

Maintenance tips to prolong your tractor’s lifespan

Your tractor is likely to be one of your business’ most expensive assets, so it’s important to take the time to care for it to extend the lifespan of your investment.

These quick and simple tractor maintenance tasks can help to keep your tractor running costs down and prevent damage to prolong your tractor’s lifespan.

Regular inspections

One of the most important things you can do to look after your tractor is take the time to inspect its condition regularly. This will help you to spot any signs of wear or damage early on and take steps to repair it and prevent further damage. Check your tractor’s manufacturer’s manual for advice on how frequently it requires servicing and specific maintenance tasks to be carried out.

Store in a dry place

When your tractor is not in use it should always be stored in a dry place where it is protected from the elements. Being exposed to moisture for prolonged periods can cause your tractor’s parts to rust and corrode, causing damage and shortening its lifespan.

Clean the air filter

Your tractor stirs up a lot of dirt and dust as it is working, so it’s important to keep any eye on its air filters and clean them regularly. Blocked air filters can cause a build up of debris to gather on your tractor’s internal components, causing them to fail and shortening your tractor’s lifespan.

Top up the oil and coolant

Your tractor requires coolant to prevent it from overheating and oil to lubricate its moving parts. Without either of these liquids you could find yourself faced with expensive damage to your tractor’s engine. Create a maintenance schedule to help you to remember to check the levels of these important fluids regularly and top them up when necessary.

Check the tyre pressure

Without the right level of tyre pressure your tractor could end up working harder than it needs to. Check what the correct tyre pressure is in the manufacturer’s manual and get into the habit of checking the pressure regularly to keep your tractor operating efficiently and protect it from damage.

If you require help or advice with financing a new tractor, speak to our team here at Richmond Asset Finance. We provide a range of flexible agricultural finance services to help you to grow your business. To discuss your requirements in more detail, give our team a call on 0113 288 3277.

Ideas for supplementing your farm income during the festive season

Cash-in on Christmas by diversifying your farm business during the festive season.

According to NatWest, two thirds of farms have now diversified their business to generate alternative revenue streams throughout the year and boost their income.

Many farms that have successfully diversified report that their additional ventures have become a vital part of their business.

Whilst the winter months are typically much quieter for agricultural businesses, with a little creativity they can offer excellent opportunities for exploring new business ideas.

Here are a few of our favourite ideas for diversifying your farm business during the festive period.

Holiday letting

Many families and friends book holidays and weekends away to meet up and celebrate together over the Christmas holidays. Rather than letting unused land or farm buildings stand empty and unused during the winter months, why not convert them into holiday lettings. This can be particularly lucrative if your farm is in a scenic location.

Grow Christmas trees

Nothing beats the smell of a real pine Christmas tree, and according to the British Christmas Tree Growers Association over 7 million trees are sold in the UK each year. Choose a type of fir tree that will thrive in your farm’s land and soil type and start growing fir trees to sell locally each Christmas.

Run Christmas events

If you’ve got the land and buildings, why not run a series of festive events for the public in the lead up to Christmas? Popular activities and events could include turning a kids’ petting zoo into Santa’s grotto, running kid’s Christmas craft activities or adult wreath making workshops.

Turkeys and geese

Rearing free-range turkeys and geese can provide an additional source of income around Christmas time when demand for high quality meats for Christmas dinner soars.

To find out if you can apply for rural finance to help with your diversification project, get in touch with our team here at Richmond Asset Finance to discuss your plan in more detail.

What is a bridging loan exit strategy?

When taking out a bridging loan you will be required to provide details of your exit strategy, the method by which you will pay back the loan.

Bridging loans are an extremely valuable form of short-term finance that can help businesses to quickly acquire money to cover an expense before credit becomes available to them.

Just some of the reasons that businesses use bridging loans include funding unexpected expenses, paying urgent debts, and investing in time-sensitive business opportunities.

Before rushing in and requesting a bridging loan though it’s very important that you create a plan for paying back the money. This is called your exit strategy.

The price of a poor exit strategy

When you take out a bridging loan you will agree a date by which the debt will be repaid. If you cannot repay the amount by this time you will need to consult with your loan provider about what happens next. 

In some instances, it may be possible to extend the loan, but beware that this is not always the case. A late repayment could end up costing you a considerable amount in renewal costs or late payment penalties, as well as having a negative effect on your credit rating, so it’s wise to ensure that you have a reliable exit strategy in place before going ahead.

Typical exit strategies

Your exit strategy will depend entirely on your business’ unique circumstances and the reason that you required the bridging loan.

A few examples of typical exit strategies include:

  • Selling a property or land
  • Selling debt to a collection agency
  • Selling shares or assets
  • Inheritance
  • Refinancing

For further information about bridging loans,or help and advice with creating a sound exit strategy, get in touch with our team of experts here at Richmond Asset Finance by calling us on 0113 288 3277.

Using rural lending to diversify…

…into alternative livestock and crops

Rural lending opportunities could help farmers to boost their income by giving them the means to diversify into alternative livestock and crops.

Many farmers are feeling the pinch of increased competition, Brexit uncertainty, and the falling price of milk. In an uncertain economy and a changing industry, diversifying can bring in a valuable source of extra income.

According to Countryfile, over half of the UK’s farmers have now diversified in some form.

Some farmers are choosing to diversify into very different areas like leisure and tourism, which require significant investment to set up.  Diversifying into alternative crops and livestock is less of a jump, uses existing skillsets, and is often more affordable.

Alternative livestock and crop ideas

Here are just a few popular alternative livestock and crop diversification ideas to inspire your new venture.

  • Goat or sheep milk.
  • Quail or duck eggs.
  • Wild boar.
  • Ostriches.
  • Angora rabbit wool.
  • Llama or alpaca wool.
  • Edible flowers or herbs.
  • Pharmaceutical crops.
  • Free-from crops.
  • Pumpkins.
  • Christmas trees.

Rural lending opportunities

For many farmers, diversification is becoming a necessity to stay afloat rather than an option. Whilst diversifying can be daunting, the results can be exciting and rewarding.

For most farmers, taking the plunge and deciding to diversify is aprofitable decision. Some farmers even find that their side-project grows into their main business. However, finding the funds to set it up in the first place can be challenging.

Rural lending opportunities provide farmers with the means to expand and grow their business. Whatever your circumstances, it is worth speaking with a specialist rural lending business like our team here at Richmond Asset Finance to find out more about how our short-term and long-term rural lending services can help you to grow your business and income.

To discuss your vision in more detail, receive free help and advice, or find out what rural finance options are available to you, give our team a call on 0113 288 3277.

Why are so many UK farmers choosing to diversify?

In today’s uncertain economic climate, many UK farmers are choosing to diversify their businessto boost their income.

Government figures show that 62% of UK farmers are now diversifying into other business opportunities to top up the income they make from traditional farming.

According to Farming UK, of the 62% of farmers that have diversified, 94% of the schemes have been financially successful.

So, if you’re not yet diversifying, it may be worth doing some research and speaking with an expert about rural finance to find out if you can get some help with financing your diversification scheme.

Why diversify?

With over half of those farmers diversifying reporting that the income from their alternative business has become ‘vital’ or ‘significant’ to their farm, can farmers afford not to diversify?

Key factors that are pushing farmers in the UK to diversify include:

  • Disease in farm animals.
  • Increased competition.
  • Falling price of milk.
  • Subsidies falling away.
  • Brexit uncertainty.

As with any business, it makes sense for farmers to avoid putting all their eggs in one basket (excuse the pun).

With many farmers owning a substantial amount of land, it makes good business sense that they use all land and buildings owned to their full advantage. Diversifying into alternative markets like leisure and tourism and renewable energy allows farmers to boost their income.

Rural finance to aid diversification

To find out if you can apply for rural finance to help with your diversification scheme, get in touch with our team here at Richmond Asset Finance to discuss your plan in more detail.

New technology and machinery that could transform farming

Advancements in technology mean that we could soon see smart farming dominating the agricultural industry.

Farmers are likely to become increasingly reliant on farm machinery finance to help them gain the new machinery and equipment they require to keep pace with technology and stay competitive.

Just a handful of the high-tech agricultural equipment set to automate farmers’ jobs include:

Sensors– Sensors can be used on the land or in machinery and equipment to gather and share information and data. Sensors can be placed in fields to gather data about the condition of the soil, or in machinery to track information about yield or condition of machinery. This information can then be accessed by the farmer from anywhere, allowing them to make the relevant changes necessary to optimise crop growth.

Drones– Drones are already being used by farmers in the US for a variety of tasks including monitoring crops and spraying chemicals.

Driverless tractors– Automated, driverless tractors can operate all day and all night, to get the job done quicker and more efficiently. Future farmers may also be able to link their tractors to sensors and drones, giving them access useful information about the field that they’re working.

Robot pickers– Picking crops is a labour-intensive task which can be completed quicker and more efficiently with the help of robots that work 24/7. Using robot pickers would also significantly reduce labour expenses.

To find avoid getting left behind, find out more about our farm machinery finance options by giving our team a call on 0113 288 3277.

Why Is The Machine Finance Market Growing?

Machines are critical to growth in the manufacturing sector but they are often expensive and can eat into business profits without some form of financial help.

Traditionally business owners turn to the bank to provide straightforward business loans to help if there is insufficient cash in the business to purchase machines. Even if there is enough cash to buy a machine, a loan can be a more sensible way to buy equipment particularly if there is risk attached in making large investments as there often is in business. However, business loans from banks also come at a cost and interest rates can be high.

Having multiple loans can also leave a business vulnerable in a downturn and restrict any cash flow available to grow the business. Machine finance is growing in popularity because it unlocks funding when you need it.

So if your business requires a new machine that will cut down the amount of manual labour required to get jobs done such as a CNC machine, machine finance can help you acquire that machinery at a minimum upfront cost.

This means you get the benefit of improved efficiency and profitability while spreading the cost. It can also be tax efficient now that the government has increased the annual investment allowance. So it comes as no surprise that the machine finance sector has grown 9% year on year.

How AIA Can Help You Finance Your Equipment

As we start the new year many of us will have plans to expand our business or perhaps look at new products and services. This may not be possible, however, without the extra costs involved in purchasing new equipment, new software and so on.

This extra cost burden can be off putting but if you take advantage of the Annual Investment Allowance (AIA) did you know that you can offset your investment in equipment and technology against tax?

Better still you can offset 100% of the investment against your taxable business income so not only do you get to improve your business operation and innovate, you can also reduce your tax burden at the same time. The allowance was also recently increased from £200k to £1million.

If you are planning to take advantage of the AIA this year you can use asset finance to spread the cost rather than invest all the cash in your business up front. This multiplies the benefit to your business.

The AIA was originally introduced in 2008 and the recent increase from £200k to £1million is designed to help stimulate investment in business at a time when it will be needed more than ever in the UK.

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