What Is Asset Refinancing?
Asset refinancing is an alternative finance arrangement that offers a simple and straightforward way to raise cash against an asset that your company already owns. Depending on the amount of funds required, you can refinance any single or multiple assets. You don’t even have to own the asset outright; refinancing arrangements can be offered on the equity tied up in company property. Refinancing a number of assets is also referred to as debt consolidation.
Richmond Asset Finance offer a number of different asset financing solutions for your business. Asset Finance is a very useful financing option because of the many benefits to your business. A business in any sector can have many financial assets and there are a number of ways to attain finance for these. In recent times this makes it the third most popular source of finance for UK Businesses.
What Are The Benefits Of Asset Refinancing?
Asset refinancing offers a simple, cost-effective and quick way to secure additional finance for ongoing business activities. You can continue to use the asset offered as security against the loan, whilst using the released funds to invest in new assets, such as a larger fleet of vehicles or new company premises. Most asset refinancing arrangements offer structured payment plans to help business owners budget effectively. Interest rates and charges are agreed upfront so you won’t incur any surprises during the lifetime of the loan. Once the loan amount has been agreed, along with associated rates and charges, you will be required to pay fixed instalments on a weekly, monthly or quarterly basis.
ASSET FINANCE IS ONE OF THE FASTEST GROWING FORMS OF FINANCE TODAY – Call us for more information.
Assets can be roughly divided into two categories, hard assets and soft assets, do you know the difference between each?
Asset finance helps businesses of all shapes and sizes to acquire the assets they require to grow and be prosperous.
The types of assets that your business requires to move forward will depend on a variety of factors including your industry, your business plan, and how established the business is.
Generally, assets are said to either be hard assets or soft assets.
Asset finance is most commonly used to acquire hard assets. Hard assets are usually physical, high value items that are essential to a business’ operation. This could include the following:
- Commercial vehicles
- Manufacturing equipment
- Printing presses
- Construction vehicles
- Plant equipment
- Engineering equipment
- Agricultural machinery
Financing hard assets provides finance companies with good security as the assets tend to retain value for many years, even at the end of their lease.
Soft assets may be more difficult to obtain with asset finance as they pose a bigger risk to the finance company. Soft assets are lower value items and have little or no value by the end of their lease. Examples of soft assets include:
- Computer hardware and software
- Office furniture
- Security systems
- Air conditioning systems
- Electronic Point of Sale systems
If you require soft assets, then you may still be able to acquire them using asset finance by providing some additional security. This could include a deposit towards the asset, a director’s guarantee, or securing the asset with another existing asset to offset the risk. However not all asset finance companies will provide funding for soft assets.
Find out more about our asset finance solutionshere at Richmond Asset Finance by giving our team a call on 0113 288 3277 to discuss your requirements in more detail.
According to the latest figures release by the FLA new asset finance business grew 9% in October 2018 compared the previous year. Many businesses will be benefiting from the boost this will contribute towards business development and growth but if you are considering joining the growing number of businesses who benefit from asset finance it is important to ensure you select the right asset finance for your business.
Most business owners opt for asset finance when much like taking on any other type of business loan they require funding. For example, they may wish to lease an asset if they want to spread the cost over its lifetime. This avoids the pitfalls of rapid depreciation of assets.
Asset finance however comes in many forms including finance lease, hire purchase and it is important to compare these against other products such as commercial loans. While the benefits of asset finance are often clear it is worth consulting a qualified expert to discuss what is best for the business both in the short and long term.
You will find a wealth of information on the different options available on our website or you can give us a call and speak to one of our advisors to find out how asset finance can work for your business.