To start a business, you’ll need a number of things. Entrepreneurs require a concept, a business strategy, and sometimes even personnel to implement the company plan. Financial assistance and a right lender are two of the most important factors in your success. As a business owner, you’re not alone if you’ve had problems getting a bank loan. The truth is that traditional financing is becoming increasingly difficult to secure. In addition, many banks are unwilling to lend money to small enterprises coupled with the increased rate of lending by banks.
Asset finance may be an option to explore if everything else fails and your company fails to secure the funding it requires.
What Is Asset Finance, Anyway?
With asset finance, you may get money to replace old equipment or purchase new equipment without putting a strain on your budget. In order to build your firm, you might use finance for the purchase or lease of assets. This might span a wide range of assets, depending on the nature of your organisation.
What Asset Financing Options Are Available?
In terms of asset finance, there are two primary categories: unsecured and secured. The two most common types of equipment financing are asset-based loans and loans secured by the equipment or assets that you currently own.
In this article we will take a closer look at three asset financing possibilities.
Renting a piece of machinery
A lease arrangement is set up in which you will only be renting the things and equipment you need, not owning them at the conclusion of your lease term.
The lender will purchase the assets you require and then rent them to you on a monthly basis under a leasing asset arrangement. As a result, you don’t have to tap into your own funds to gain the assets you need for your firm.
Refinancing of your current assets
Businesses that currently own equipment but require a portion of the capital associated with that equipment might use asset refinancing agreements. Your assets and equipment will be purchased and left with you by the financier for a certain amount of time.
Hire-to-Own
In terms of asset financing arrangements, hire-purchase contracts are among the most prevalent and popular. With their help, you’ll be able to have immediate access to any resources you require. You will be the owner of the asset after making a certain amount of payments. These have a one-to-six-year duration. You’ll have to put down a down payment and then make monthly payments after that.
What are the benefits of using asset financing?
As important as physical assets may be for your company’s success, they may also be quite costly. It can assist you avoid depleting your resources and running into problems with your financial flow. In addition, asset finance may help your firm get started by allowing you to acquire new equipment that can boost efficiency.
Asset financing offers various businesses who need financial assistance in acquiring equipment for rent or outright buy to acquire with ease. You may find that asset finance is an excellent choice.
Get in touch with us at Funding Bay for your Asset Finance needs.
Check out our Asset Finance Calculator.
