Tag: Asset Based Lending Record (page 3 of 5)

Why Your Business Should Consider an Equipment Loan

28th November 2018 / admin / Comments Off

All businesses need equipment and some will require more expensive equipment than others so how should you fund the purchase of that equipment?

The answer is an equipment loan. If you are wondering how you can turn equipment you haven’t purchased yet into a loan let’s fill you in on the details.

An equipment loan is normally based in the lifespan of the equipment you purchase so it is ideal for those major pieces of equipment you expect to be using for a long time.

The advantages of an equipment loan include the following:

The equipment is used as collateral for the loan so the risk is less than it would be for other types of loan. What is more you will be the owner of the equipment you are financing so you will build a certain amount of equity over time.
Rates are competitive and certain business types may find this type of loan preferable and less expensive than term loans or other far riskier forms of finance such as credit cards.

Disadvantages:

You may need to make a down payment on the equipment you are financing which could mean a higher upfront cost than alternative forms of finance.
You need to be sure the equipment won’t become obsolete before the term is up.

Types Of Business Finance You May Not Have Heard Of

20th November 2018 / admin / Comments Off

Your idea of business finance may be a trip to the bank to get a business loan and this is the route most SME business owners will go down. However, there are plenty of alternative sources of finance to explore including some of the following you may not be aware of.

Asset Finance
Asset finance is ideal for businesses that require expensive equipment but lack the funds to go and pay for all the equipment needed upfront. Asset finance can come in many forms from vehicle finance to finance on machinery. Asset finance is also flexible and can be arranged in the form of a lease or higher purchase (hp).

Invoice Financing
Did you know you can use your unpaid invoices to gain finance? You can use those invoices as collateral for loans or you can sell them to an invoice factoring company. This means you can get your hands-on cash in advance without having to wait for invoices to be paid. This is a great source of funding if you need cash in a hurry but with invoice financing you will still need to collect the invoice payments yourself.

Merchant cash advances
Another way to get your hands on some cash fast is to use a merchant cash advance. With this form of business finance, you receive a lump sum of cash up front and you won’t need to make a fixed payment each month. Finance can be paid back daily weekly or it can be paid out as a percentage of your sales from credit and debt cards. The downside is this type of finance can be more expensive than other options.

3 Reasons Why You Should Use A Commercial Finance Broker

12th November 2018 / admin / Comments Off

Business owners can often be afraid to look at alternative routes for their finance needs but there is a lot to be gained from using a commercial finance broker to get the best finance deals.

Here are 3 reasons why your business should consider using a finance broker

You can get access to better rates
You shop around for everything else so why not shop around for the best rates on finance? A commercial broker can often obtain special rates from lenders because they will generally have good long term relationships with them. They can also help with paperwork to ensure you give yourself the best chance of securing the finance you need.

They are experts
Commercial finance brokers that have the relevant qualifications and accreditations are experts in their field. Using experts in anything will save you time and sourcing the best finance products is no different.

Save Yourself Time
We are all growing accustomed to just going online and searching for deals for anything from shopping to houses but finance is different. The various products available could never fit on one price comparison website so it could take a huge amount of time for you to try to beat the rate your commercial finance broker can provide.

Why Should You Lease Rather Than Purchase…

7th November 2018 / admin / Comments Off

…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.

MCAs Explained

26th October 2018 / admin / Comments Off

You may have heard about a form of lending known as a Merchant Cash Advance (MCA) which is currently growing in popularity. So what is an MCA and how can it be used by a small business? Read on to find out…

MCA’s are potential solution for businesses that need to maintain cashflow and are often applied for when it hasn’t been possible to secure a business loan. This is the case for many small businesses that apply for loans each year.

In fact net lending to small businesses in the UK has fallen from £3 billion in 2016 to just £700 million in 2017 which marks a substantial fall. The difficulty of obtaining a business loan from a traditional lender is as problematic as ever but all is not lost with a growing range of alternative options available.

The MCA doesn’t require any collateral to secure or even a personal guarantee. The money owed is simply paid back via card transactions. This makes this type of loan most suited to businesses that use card terminals on a regular basis to collect payments such as restaurants and retailers.

An up front cost is paid to receive a cash advance and the remainder of the advance is paid off by having a small percentage pf each card payment being paid to the MCA provider.
This makes repayments more flexible because the percentage remains the same and the amount paid will fall accordingly if takings are down.

If you would like to find out more about alternative sources of finance for your business contact us today.

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

20th October 2018 / admin / Comments Off

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.

Can I Get A Small Business Loan For My Start Up?

10th October 2018 / admin / Comments Off

This is a common question asked by many a start-up founder who needs cash to get a business off the ground. The unfortunate reality is, a start-up represents a high risk to most lenders making them reluctant to provide loans to untested business start-ups.

While this might seem unfair, think of it from a lenders point of view. With an established business they will have some track record to go over before making the decision to lend. They will see things such as order books, records of paying customers and so on.

With a start up all they are likely to see is a business plan at best and an unproven business model. While the business might have huge potential in the eyes of the business owner, lenders, particularly those on the high street will be far more pragmatic.

Yet the start up phase is when a business is most likely to need the funding which is why it is important to discover what lenders of all types will be looking for before they offer a business loan.

If your business doesn’t have any sort of track record to rely on, then lenders will look at things such as your personal credit rating. If this is good then it will make you less of a risk as the business owner. Also you could look at alternative sources of finance such as asset finance depending on the assets your business might already possess.

Bridging Loans The Pros and Cons

4th October 2018 / admin / Comments Off

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

21st September 2018 / admin / Comments Off

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.

Are UK Businesses Shrugging Off Brexit Uncertainty?

21st August 2018 / admin / Comments Off

It would appear so according to some statistics released in the past month, however measures of sentiment vary.

While the past month cannot be seen as a crisis for the UK’s Brexit plans, it has at times been close to one. Despite all the uncertainty about whether the UK is going to crash out with no deal or not, the economy has continued to be coping well and carrying on in an upward trajectory.

Business confidence according to Lloyds Bank is at its highest level since the referendum with 25% of SME businesses feeling confident about sales orders and profits. This marked a rise of 2% on the 23% recorded in January 2018.

When it comes to investment, however, the results are not so clear with some data showing that the number of firms not planning to invest in the next 6 months rising by 10% this quarter.

While many business owners and politicians will be thinking more about their holidays than business this month, it could be the calm before the storm when we are set to see negotiations begin again in the autumn.

Those leading the Brexit negotiations will continue to walk a precarious tight rope to protect the interests of business and its people.

Common Questions About Asset Finance Answered

20th June 2018 / admin / Comments Off

Asset finance can be the key to achieving real growth in your business particularly when you need a flexible way to raise finance while protecting your cashflow at the same time. Here are some answers to some of the common questions we receive from business owners who ask about asset finance.

Why use asset finance instead of paying in full for the asset?
Like any other form of lending, asset finance gives you the flexibility to continue to invest in your business without using up all your capital. Paying in full means using up your cash which can leave your business vulnerable in a downturn.

How hard is it to get asset finance for my business?
An increasing number of businesses are benefiting from asset finance and it among one of the most accessible sources of funding out there. Compared to other alternative forms of finance for your business, asset finance can often be the best option.

What can I use asset finance for?
Asset finance is used to invest in equipment that is needed to improve areas such as productivity, and efficiency or to expand your business into new areas with investments in assets including machinery.

If you would like to find out how asset finance can help your business, give us a call. Our experts are happy to answer any of your questions

Two Thirds Of Asset Finance Brokers Say Brexit…

5th May 2018 / admin / Comments Off

…Has Had An Impact On Investment

The fuss over the UK’s exit from the EU may have died down in the popular consciousness as people have largely resigned themselves to the inevitable, but the fallout in the business world is still playing itself out. This has led to many asset finance brokers blaming Brexit for decisions among business owners to delay investments.

This was at least the findings of a survey by United Trust Bank. Despite a long term boom in asset finance lending as businesses become more aware of its benefits compared to traditional forms of lending, 67% of asset finance brokers have said Brexit has had an impact on investment decisions.

The problem is said to be particularly evident in the vehicle, plant and machinery sectors indicating a fall in confidence in businesses that are likely to be seeking investment in these areas of their businesses.

Just over one third of asset finance brokers 33% felt that the UK’s exit from the EU wasn’t having any negative impact.
Much of what plays out in the coming months will depend on what deal the country makes with the EU and for businesses, whether or not their operations will be affected by Brexit if their market is largely or wholly domestic.

Mixed Results For Asset Finance

26th April 2018 / admin / Comments Off

Following several consecutive months of growth, the latest figures released by the Finance and Leasing Association (FLA) reveal mixed news for the asset finance market in the 12 months to February 2018.

The two sectors that have performed strongly according to the latest data are Plant and Machinery Finance and IT equipment. The former saw a 5% increase in asset finance while the latter saw a 13% increase suggesting these sectors are more willing to explore alternative sources of finance in the current economic climate. The same can be said for the manufacturing and the agricultural and construction sectors.

Two sectors that have not performed well in the 12 months to February are commercial vehicle and surprisingly business equipment which had seen growth up until this point. Commercial vehicle finance saw a 5% drop while business equipment saw a 20% fall.

Despite these mixed results, the underlying health of the asset finance sector remains strong and continues to offer businesses a less risky alternative to banks loans and other traditional forms of lending.

If you would like to find out more information on how asset finance could help with your own business investment, contact us today for advice.

Small Businesses Moving Away From Bank Lending

22nd March 2018 / admin / Comments Off

According to a recent report in the Financial Times, small businesses are increasingly likely to be looking to specialist lenders they are finding online.

The article reports that the chief executive of the British Business Bank saw evidence that small business owners exercising all their options when it comes to lending which includes anything from asset finance to peer to peer lending and venture capital.

Fear of getting turned down by banks has been given as one of the main reasons for the movement towards alternative finance while the number of businesses applying for bank loans has remained flat.

As with retail, there is a quiet revolution taking place where business owners have followed consumers online and to what they perceive as better deals.

Taking on a business loan from a bank is seen as risky compared to asset finance, which is comparatively less risky and allows business owners to use their existing assets to free up cash or boost cash flow.

According to the recent report asset finance lending increased by 12% last year while peer to peer lending increased by 51%. Equity investments meanwhile increased by 79%.

If you would like to find out more about how asset finance can help your business, then give us a call today.

Business Confidence On The Rise

27th February 2018 / admin / Comments Off

Analysis from several financial services firms of business confidence levels points towards an improving picture. Businesses are said to be more optimistic about future growth although they are still cautious about the year ahead.

The rise in confidence levels at the start of this year brings a halt to months of decline and has perhaps been buoyed by news of a strengthening pound and the prospect of Brexit not being as bad for the economy as everyone expected.

While businesses have plans to invest in the future, it is also true that bank lending to businesses fell by £1bn during the month of December 2017. Loans to businesses in the SMEs sector saw a significant drop too falling at their fastest for three years.

Alternative finance, meanwhile, has been the sector to benefit from the continuing sense of caution with businesses reluctant to take on new debts to fund any expansion plans they may have.

Asset finance takes away some of the risk involved in borrowing from banks and allows a business to use its assets to access funding.

Business that rely on importing and exporting into the EU will be watching closely to see what happens over the next 12 months and it is unlikely the mood of caution will be lifted during this period.