Do you know a lot of businesses in the UK are under pressure to increase sales but may be restricted by a lack of available cash or credit? Different types of finance are available to business owners but one option which is often overlooked is asset finance. Asset finance can provide a solution by allowing businesses who can’t afford such procurement to free up cash that is tied up in existing assets, such as plants and machinery, and use it to finance new purchases which can help the retailer of expensive goods increase sales.
Why asset finance?
Asset finance can be used for a variety of different purposes, including the purchase of new machinery, vehicles, or office equipment. It can also be used to finance business expansion plans, such as opening new premises or taking on additional staff.
Companies like automobile warehouses that sell expensive cars and stuff like mining machinery always go for asset finance as it helps them free up the cash flow and expand their businesses.
Asset financing can allow people who can’t afford the full purchase price of an item to spread the cost over a period of time, making it more affordable.
For businesses, asset finance can offer a number of advantages, including:
The benefits of asset finance for businesses
There are a number of reasons why asset finance can be a good option for businesses looking to finance new purchases or expansion plans.
Asset finance can be a more flexible and affordable option than taking out a traditional bank loan, as businesses only need to repay the monthly rental payments. This can help businesses to better manage their cash flow.
Access to finance:
Asset finance is a source of finance that can be accessed by businesses of all sizes. It can be used to finance both small and large purchases and can be tailored to suit the individual needs of each business. It can be used by businesses of all sizes, from start-ups to large corporates
Flexibility:
Asset finance offers a degree of flexibility that other types of finance may not. For example, businesses can choose to finance 100% of the purchase price of an asset, or they may only finance a portion of it. This means that businesses can keep some of their existing cash reserves intact.
Flexible repayment terms:
Asset finance agreements typically last for 2-5 years, giving businesses the time they need to generate the income needed to repay the loan.
Tax advantages:
Asset finance can offer tax advantages for businesses. For example, businesses can claim tax relief on the interest paid on asset finance loans.
Improved cash flow:
Asset finance can improve a business’s cash flow. This is because businesses can make smaller, regular payments on an asset finance loan, rather than having to make a large upfront payment. This can free up cash that can be used to invest in other areas of the business.
Fast and easy to arrange:
Asset finance can be arranged quickly and easily, with minimal paperwork.
No impact on credit score:
Applying for asset finance will not impact a business’s credit score.
Tips for getting started with asset finance
If you’re thinking about using asset finance to finance new purchases or expansion plans for your business, there are a few things you need to keep in mind. Here are some tips for getting started with asset finance:
Do your research:
Before you apply for asset finance, it’s important to do your research and compare the different options available. There are a number of different asset finance providers in the UK, so it’s important to compare the rates and terms on offer to find the best deal for your business.
Read the small print:
When you’re comparing asset finance deals, it’s important to read the small print. This includes the interest rate, repayment terms, and any early repayment charges.
Get advice:
If you’re not sure whether asset finance is the right option for your business, it’s a good idea to speak to a financial advisor. They’ll be able to advise you on the best way to finance your new purchases or expansion plans.
Shop around:
Once you’ve decided that asset finance is the right option for your business, it’s important to shop around and compare the different deals on offer. This will help you find the best deal for your business.
In conclusion, asset finance can be a great way for businesses to finance new purchases or expansion plans. It can offer a number of advantages, including flexibility, improved cash flow, and tax advantages. If you’re thinking about using asset finance, it’s important to do your research and compare the different deals on offer. Once you’ve found the right deal for your business, you’ll be able to enjoy the benefits of asset finance.
Get in touch with us at Funding Bay for your Asset Finance needs.
Check out our Asset Finance Calculator.
