Category: Start-up Loans

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.

Small businesses boosted by bounce back loans

The government have announced its intention to offer bounce back loans to small businesses. The key terms of these loans are:

  • businesses will be able to borrow between £2,000 and £50,000 and access the cash within days.
  • loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form.

Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders.

Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.

The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.

The government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.

UK banks set out details of Covid-19 mortgage holidays

Households hit by coronavirus will not lose credit ratings if they delay payments as the government gives a 3-month mortgage holiday.

The unpaid interest will still be recovered later, but individual credit ratings will not be affected.

The Guardian has suggested that ‘firms will help customers the best way for the individual, but an automatic payment holiday may to always be the most suitable approach and may not be required by all customers’.

Full payment of the arrears will still assume an eventual full repayment of arrears. While a person is taking a payment holiday, the interest that would have been paid will still rack up, and the capital sum of the loan remains.

These holidays are not a long term solution but they are designed to help the temporary income shortfall. If this is a smooth and seamless process that will enable homeowners to self-isolate without having to worry about their mortgage payments then clearly it is a significant move in the right direction.

Should I buy a used mini excavator?

If you’re thinking about investing in a mini excavator, one of the first decisions you’ll need to make is whether to buy new or used.

Mini excavators have quickly become a must-have piece of machinery in the construction industry.

They offer the same level of performance as their larger counterparts, but on a smaller scale and with added benefits.

The biggest advantage of the mini excavator is its compact size, which allows for excellent manoeuvrability, even in tight spaces. Generally, they are also more affordable, fuel efficient, and easier to operate than wheeled, tracked or truck-mounted excavators.

New or used?

When buying a mini excavator, you may be able to save a significant amount off the initial price by buying used. This will also help you to avoid the cost of the vehicle’s initial depreciation, which can be as much as 20 to 40% in the first 12 months.

If you do decide that buying used is the right route for your business, then it’s important to do your research and know exactly what to look for when shopping for a used mini excavator to ensure that you’re getting a good deal.

What to look for in a used mini excavator

Before investing in a used mini excavator you’ll want to ensure that the machine has been well cared for, maintained, and still has plenty of life left in it.

Bear in mind that mini excavators generally have a maximum of about 10,000 hours of usage in them, and that’s only if they’ve been well maintained and not run into the ground.

Most experts will advise you to only buy a used mini excavator with fewer than 2,000 hours on the clock to ensure that you get your money’s worth from it.

A thorough inspection should be carried out on the mini excavator to check for signs of leaks, rust, excessive wear, dents, and repair welds, all of which could signal that there are problems with the vehicle.

If you require help or advice with financing a mini excavator for your business, speak to our team here at Richmond Asset Finance. We provide a range of flexible vehicle finance and asset 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.

5 reasons to invest in a mini excavator

Are you using your excavator to its full potential, or could you do the same job using a mini excavator?

Mini excavators are practical, affordable and hassle-free pieces of machinery.

Whilst they’re not always suitable for largescale jobs, if you can get away with using a mini excavator over a bigger wheeled, tracked or truck-mounted excavator then there are plenty of benefits to be had.

Manoeuvrability

The mini excavator is the perfect piece of machinery for working in small or tight spaces. It offers the same level of performance as a larger excavator but in a more compact and practical design. The small size of the mini excavator makes it nimble and agile on-site and means transportation is simple and hassle-free.

Easy to operate

Mini excavators tend to be very simple and intuitive to operate, reducing the amount of time required to train an operative to use the machinery and minimising the risk of errors being made.

Cost-saving

Mini excavators are more affordable to purchase and operate than their larger counterparts. They also offer higher fuel efficiency and lower fuel costs. Their relative ease of operation means training operatives will cost your business less time and money. 

More environmentally-friendly

The small size and increased fuel efficiency make mini excavators more environmentally friendly to run than larger excavators. They also produce less noise pollution, making them ideal for use in noise and pollution sensitive areas.

If you require help or advice with financing a mini excavator for your business, speak to our team here at Richmond Asset Finance. We provide a range of flexible vehicle finance and asset 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.

Looking for Alternative Tractor Finance?

Here’s How Farm Finance Can Help

Growing a farm business much like any other business is no easy task if a business lacks the finance to fund growth. For these farms it is almost inevitable that financial help will be required at some point to grow the business.

Tractors are a critical component in the day to day running of a farm and one of its most important pieces of machinery. An unreliable or outdated tractor can impact on productivity and efficiency as well as cost the business money much as the opposite is true if you are purchasing a good, reliable up to date model.

A tractor can cost in excess of £250,000 which is a substantial sum for any business and even standard models can cost in the region of £80,000. So, like any investment decision, buying a tractor will require a careful assessment of the improvements it is likely to bring to the business and how it will impact on the bottom line.

Tractor purchases can be made in the form of lease or HP arrangements that provide farm business with a more flexible way to purchase machinery they need. Even if the business has sufficient finance to purchase these machines outright it, asset finance can still offer flexibility and help protect funds for a rainy day.

Why Should You Lease Rather Than Purchase…

…Vehicles For Your Business?

There are many advantages to be gained from leasing using vehicle finance rather than purchasing a vehicle outright for your businesses. So it should come as no surprise that uptake continues to grow to the point where 300,000 cars were leased to UK companies according to statistics released last year (2017).

The two major attractions of financing rather than purchasing a vehicle include saving on the upfront cost and the ability to offset payments against tax. So while you may have enough cash in your business to purchase a van or a car, why would you when there are flexible ways to finance your vehicle and you can use that spare cash to fund and grow other areas of your business.

Vehicle finance like any other form of business finance works because you get to spend less cash which is ultimately what keeps a business afloat.

Vehicle finance can come in a variety of packages with the main ones being higher purchase agreements or business contract hire. The former is arranged on an agreed set monthly payment while the latter is an agreement to pay off the depreciation value of the vehicle.

Agreements can be arranged over a period that suits the business and its cash flow and the vehicle can either be sold at the end of the agreement or it can be transfer to your full ownership.

Is It Possible to Get a Business Loan with Bad Credit?

Often one of the biggest barriers to small business and start up founders getting a business loan is a poor credit rating. So, if you have been turned down for a loan because you have bad credit let’s look into ways it may be possible to gain funding for your business even if you have a bad credit rating.

Find out why you have a bad credit record
Review your credit score online and find out what may be causing the problem. A poor credit score can come as a surprise and the first thing you know about it is when you are refused a loan. Sometimes the cause can be rectified if for example there are some discrepancies in addresses, your name isn’t on the electoral roll or if you have missed credit card payments.

Research lenders willing to provide loans to people with below average credit scores
Some lenders will consider business owners with below average credit scores so it is worth doing some research to find them. If your credit score is below 500 this can start to make life difficult and lenders willing to take the risk on you will become harder to find the lower your score is.

Look to alternative sources of finance that won’t require a good credit score
You may find there are plenty of alternatives available when it comes to finding funding for your business. Friends and family might be one avenue if they are understanding and supportive or asset finance could be an option.

Work to improve your credit score
Your credit score isn’t set in stone and it can improve significantly if you pay all your bills on time and avoid running up debts. Taking out smaller loans and using a credit can actually help improve your rating if you are sensible about making more than the recommended monthly repayments.

Bridging Loans The Pros and Cons

There will be pros and cons to using any form of loan to fund your business and bridging loans are no exception. So to help you decide if a bridging loan is right for your business, here are some of the advantages and disadvantages of bridging loans.

So first let’s look at some advantages…

They are fast
Bridging loans tend to be arranged faster than other types of loan because they can often be used for urgent sources of finance when waiting too long might put the future of a business in jeopardy.

You can use more than one type of security
As long as the security you are using will retain its value. This means you can use assets that you may not be able to use as security for other types of loan.

The cons of taking out a bridging loan are…

You need assets to secure the loan
Unlike other types of loan, a bridging loan can only be provided if there are assets which can be provided as security.

You will be required to pay a lump sum at the end
This means the pressure is on from day one to earn enough money to cover the loan repayment at the end of the agreed term.

If you would like to find out more about the various different types of business loans available. Contact our experts today.

Guide To Start-up Loans

What is a start-up loan? How does a start-up loan differ from a conventional loan if at all? Find out more in this short guide to start-up loans.

What Is A Start-Up Loan?
There are many different types of loans an load products on the market which can be used by start-up founders to fund their business. A start-up loan however is a traditional type of loan from a traditional lender however there are different types of loan available depending on the needs and financial position of the business. Start-up loans are not to be confused with other newer forms of loans such as crowd funding.

What are the various types of start-up loan?
One of the more popular types of loan for a startup is a line of credit. This essentially works in much the same way as a credit card. A set amount of money is available to the business owners to use when they need it. Agreements are often interest free to begin with but can come with a sting in the tail when this period is up and interest becomes chargeable.

Equipment financing is a type of loan that allows a business to purchase the equipment it needs to function with the loan used as collateral. This type of loan is usually available at a lower interest rate than many alternative types of loans. The purchase can then be paid off as the business hopefully gorws and starts generating income. The depreciation of equipment can also be offset against tax which is another benefit of this type of loan.

The great benefit of this loan is that rather than fronting the cost of equipment before your business opens, you are able to pay off the cost as your business grows and makes money.