Category: Asset-Based Finance and SMEs (page 5 of 7)

Could investing in agroforestry increase your farm’s income?

An agroforestry system could help your farm to become both more productive and more sustainable.

As we begin to feel the effects of climate change, farmers are under pressure to make their business’ more sustainable.

Combined with the impending changes the industry may face as result of Brexit, these are uncertain times for farmers.

A new handbook published in collaboration with the Farm Woodland Forum and the Soil Association, has hailed agroforestry as a solution for both increasing farm productivity and making farms more sustainable.

We’ve looked at what agroforestry is and how it can benefit your farm and the wider environment.

What is agroforestry?

Agroforestry is the process of growing trees or shrubs within or around farmland.

Incorporating trees into farmland has numerous benefits for both the environment and the farmer.

Environmental benefits of agroforestry

Helps to cut greenhouse gas emissions.
Habitat for wildlife.
Improves biodiversity.
Improves soil quality.

Benefits of agroforestry for the farmer

Improves welfare of livestock.
Improves soil quality.
Creates a microclimate for crops.
Additional income from fruits and nuts from trees.
Additional income from timber later down the line.
Replace imports with homegrown products (e.g. mulch, fuel wood, animal bedding, timber posts)

Increasing your farm’s income with agroforestry

According to the new handbook, improving animal welfare with trees can boost farm productivity, resulting in a 17% increase in milk production and a 50% reduction in lamb mortality. It finds that agroforestry systems are often 30% more productive than monocultural systems.

Financing agroforestry

Here at Richmond Asset Finance, we offer a variety of agricultural finance products to help your agricultural business grow. We can provide effective farm finance strategies for various sized projects.

To find out more about our farm finance options, or to discuss your requirements in more detail, give our team a call on 0113 288 3277.

Hard assets and soft assets explained

21st July 2019 / admin / Comments Off

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.

Hard 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
Machinery
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

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.

Asset finance market continues to show signs of growth

15th July 2019 / admin / Comments Off

After a record-breaking year for asset finance in 2018, the flourishing industry continues to show signs of growth for 2019.

In 2018 the asset finance market grew by 3%, hitting a new record level, with new business totalling over £33 billion.

As we entered 2019 the financial insecurity of Brexit was looming and it seemed uncertain whether this growth was sustainable, but statistics so far this year have shown continued growth.

Figures recently released by the Finance and Leasing Association (FLA) show that asset finance new business, for deals of up to £20m, grew by 6% in May compared to the same month last year. New finance for plant and machinery grew by 8%, as did commercial vehicle finance.

This follows the news that new business is up by 8% for the industry in the first five months of 2019.

It appears that more businesses than ever are turning to the asset finance industry this year for help growing their business.

In fact, according to the FLA, in the first quarter of 2019 the percentage of UK equipment investment being funded by asset finance stood at 38%, the highest it’s been for more than a decade.

It’s easy to see the appeal of asset finance to businesses. Acquiring assets and repayment is affordable, fast and uncomplicated when compared to applying for a traditional bank loan or overdraft.

Asset finance is currently the third most popular form of business finance after bank overdrafts and loans, helping thousands of businesses to obtain the assets that they require to develop and grow.

Here at Richmond Asset Finance, we provide a variety of flexible finance solutions including asset financeand refinance. For more information about any of our services, or to discuss your requirements in detail, give our team a call on 0113 288 3277.

What is a bridging loan exit strategy?

28th June 2019 / admin / Comments Off

When taking out a bridging loan you will be required to provide details of your exit strategy, the method by which you will pay back the loan.

Bridging loans are an extremely valuable form of short-term finance that can help businesses to quickly acquire money to cover an expense before credit becomes available to them.

Just some of the reasons that businesses use bridging loans include funding unexpected expenses, paying urgent debts, and investing in time-sensitive business opportunities.

Before rushing in and requesting a bridging loan though it’s very important that you create a plan for paying back the money. This is called your exit strategy.

The price of a poor exit strategy

When you take out a bridging loan you will agree a date by which the debt will be repaid. If you cannot repay the amount by this time you will need to consult with your loan provider about what happens next.

In some instances, it may be possible to extend the loan, but beware that this is not always the case. A late repayment could end up costing you a considerable amount in renewal costs or late payment penalties, as well as having a negative effect on your credit rating, so it’s wise to ensure that you have a reliable exit strategy in place before going ahead.

Typical exit strategies

Your exit strategy will depend entirely on your business’ unique circumstances and the reason that you required the bridging loan.

A few examples of typical exit strategies include:

Selling a property or land
Selling debt to a collection agency
Selling shares or assets
Inheritance
Refinancing

For further information about bridging loans,or help and advice with creating a sound exit strategy, get in touch with our team of experts here at Richmond Asset Finance by calling us on 0113 288 3277.

How bridging loans can help businesses affected by seasonality

15th June 2019 / admin / Comments Off

Commercial bridging loans provide businesses affected by seasonality with funds to bridge the gaps between seasonal peaks and troughs in revenue.

Seasonality is a challenge faced by businesses in a variety of industries whereby they experience recurring peaks and troughs in income throughout the year.

One of the commonest causes of seasonality is the weather. Many businesses thrive during the warmer summer months and then see a sharp decrease in revenue when the weather is wet and cold.

The weather is by no means the only cause of seasonal dips though. Other factors that could cause seasonal changes in revenue include the economy, university terms, and special celebrations like Christmas, Valentines’ Day, Easter, and Mothers’ Day.

Tackling seasonality

Businesses that are affected by seasonality should take the time to analyse their performance throughout the year and understand when and why these dips and troughs occur. Once they have a good understanding of what is happening and why, they can adjust their budget throughout the year accordingly and make plans to drive sales or push alternative sources of revenue during the dips. This could involve setting up a side-project, running special offers, boosting marketing efforts, and hiring seasonal staff.

Even businesses that have prepared and planned for seasonal dips may find themselves struggling with cash flow during these quieter periods though. This is when a bridging loan may come in handy.

Bridging loans to finance seasonality

Bridging loans offer businesses affected by seasonality a quick way of acquiring the funds they require to tide them over during a seasonal dip.

As well as being useful for keeping the business afloat and paying for unexpected expenses during quieter periods, bridging loans can also be useful for maximising profits during peak periods.

Businesses that experience significant increases in demand at certain times of the year will need to inject large amounts of money into buying stock and hiring staff before they enter their busy periods. A bridging loan allows them to acquire more inventory and cover greater expenses to further increase sales during these seasonal peaks.

At Richmond Asset Finance we provide flexible commercial bridging loansto help with your business’ immediate financial requirements during seasonal peaks and troughs. To find out more about our bridging loans, give our team of experts a call on 0113 288 3277.

Sources of finance for start-up businesses

6th June 2019 / admin / Comments Off

Finding the funds to get your start-up business off the ground and turning a profit can be challenging, here’s where to start.

Growing a new business can be difficult without a healthy cash flow. Purchasing business premises, investing in stock, hiring people, and marketing your new venture all costs money.

Finding the best finance solutions to meet your start-up’s specific requirements is key to setting up and growing a successful and profitable business.

Here are the five key sources of finance that every start-up business should consider.

Personal sources

Personal sources of finance should be a given, these can include savings, personal credit cards, collateral from assets, and loans from friends and family members. Investing your own money gives others confidence in your new venture and your commitment to it.

Government grants

Acquiring a government grant can be a lengthy and laborious process, so whilst extremely valuable, a grant is unlikely to help in the short-term if you need money fast. Grants are usually awarded to businesses working towards a specific aim, and the criteria for eligibility can be very niche. Business ideas in sectors that make a significant contribution to society are more likely to be eligible to a government grant, particularly environmental projects and businesses working in renewable energy, the local community and innovative science.

Banks

Banks can offer your start-up business a range of flexible finance solutions to suit your needs. Bank overdrafts can provide short-term finance, whilst a bank loan is designed as a longer-term borrowing solution.

Commercial finance broker

Professional commercial finance brokers like our team here at Richmond Asset Finance are experienced at helping start-ups to find the most suitable finance solutions. Financing options that can be particularly useful for start-ups include asset financeand bridging loans, both of which can help you to gain the assets you require to get your new venture up and running.

Investors

Angel investors are wealthy individuals who seek opportunities to invest in start-up companies. It can be very useful to have an angel onboard with your start-up business as they are often willing to contribute experience and contacts to your business in addition to cash.

For more information about any of our commercial finance solutions, give our team of experts here at Richmond Asset Finance a call on 0113 288 3277.

Four times a bridging loan could help your business grow

6th June 2019 / admin / Comments Off

Bridging loans offer a quick and simple way of raising finance to take advantage of time critical business opportunities.

Whether you’re a new start-up or a well-established business, finding a large sum of money for a new investment at very short notice can be difficult and risky.

However, regularly allowing opportunities to pass you by can be just as damaging, making it difficult to keep up with competitors and preventing growth.

This is where bridging loans can help.

A bridging loan is a short-term funding solution that bridges a gap between a debt becoming due and credit becoming available.

Here are four times when a bridging loan could help your business to grow.

New equipment or machinery– A bridging loan can be used to purchase new equipment or machinery to increase the efficiency, output, or cost-effectiveness of your business’ production process.

Investment opportunities– Profitable investment opportunities don’t come around every day, but when they do you want to be able to snap them up. From new business partnerships to new stock, investing in fresh opportunities is what keeps your business current, competitive and profitable.

Buying property or land– Bridging loans are most commonly used for purchasing property or land and developing it. When buying property, time is of the essence, and applying for a mortgage can be a lengthy process. Bridging loans are ideal for raising funds very quickly to bridge the gap until the mortgage comes in.

Start-up costs – If you’ve identified an opportunity for a new business venture then you’ll want to act quickly to capitalise. A bridging loan can provide you with the funds you need to get your new business off the ground or market your idea.

For more information about commercial bridging loansor to discuss applying for one, get in touch with our team here at Richmond Asset Finance by giving us a call on 0113 288 3277.

How to get an agricultural mortgage

24th May 2019 / admin / Comments Off

Agricultural mortgages are available to those wishing to buy their first farm, extend their existing farm, or purchase rural property or land for another purpose.

Finding the right rural property or piece of farmland can be a challenge. Not only do we have a shortage of rural land, but prices have also sky rocketed since the recession. According to areportby Savills, the value of farmland increased by 277% between 2006 and 2016.

With demand currently so high, if you do come across the perfect property or piece of land, you’ll want to seize the opportunity and snap it up as quickly as possible. Unless you have the money to purchase the land or property outright, you will probably require a farm mortgage for your purchase.

What is an agricultural mortgage?

Agricultural mortgages are designed to help with the purchase of farmland, farm buildings, and other agricultural properties.

Just a few of the property-types that they can be used to purchase include:

Working farms
Equestrian facilities
Country estates
Renewable energy sites
Other rural businesses

In some instances, you may also be able to use an agricultural mortgage to fund the conversion or expansion of a rural building, purchase assets for business growth, or raise funds to consolidate debts.

Agricultural mortgages work in much the same way as regular mortgages, with lenders usually loaning up to 80% of the value.

How to get an agricultural mortgage

Agricultural mortgages can be acquired from most high street banks, as well as from more specialist rural lenders.

Specialist lenders usually have many years of experience in the agricultural industry and a greater understanding of its challenges and opportunities.

It’s important to shop around when looking for an agricultural mortgage to ensure that you receive the best advice, support, rates, margins, fees and terms.

If you require financial help in acquiring a mortgage, then a commercial bridging loan may be the flexible short-term funding solution that you’re looking for.

Get in touch with our team here at Richmond Asset Finance by calling 0113 288 3277 to discuss your requirements and find out more about our commercial bridging loans.

How farmers can overcome cash flow problems

12th May 2019 / admin / Comments Off

Farmers must brush up on their financial management skills to tackle the industry’s current cash flow crisis.

Falling prices, tight margins and growing debts are all putting farmers at risk of running into serious cash flow problems.

A 2016 study conducted by the Prince’s Countryside Fund found that 49% of surveyed farm businesses were suffering from cash flow problems, and the problem has only intensified since then.

Cash flow is essential to any business’ financial security and ability to invest in new opportunities and grow. Farmers in financial difficulty should act immediately to free up money and resolve cash flow issues.

Review your budgeting– If your farm business is struggling with cash flow then it’s time to sit down and review your budget and financial plan for the year ahead. Cut all non-essential expenditure for the short-term and prioritise expenditure that will generate cash flow.

Chase debtors– If you have outstanding debts owed to you then now is the time to start chasing them. Poor accounts receivable management is one of the biggest causes of cash flow problems. Make sure that you have a process in place to encourage debtors to pay you on time.

Extend repayment periods– If you have loans outstanding then speak with your lenders to see if you can arrange to extend your repayment period to reduce your monthly outgoings.

Liquidate stored crops– Liquidating your stored crops isn’t a decision that should be made lightly, but if you’re in desperate need of an injection of cash it offers a quick way of putting cash in your pocket. This is only a short-term strategy and reserves should be built up again once you are out of immediate financial danger.

Defer large investments– Reign in the spending until you’re confident that your business is out of the danger zone. If you’re having problems with vehicles or machinery, try getting them repaired instead of replacing them until your cash flow is looking healthier.

Explore farm funding options– There are plenty of useful farm funding solutions on the market today that can help struggling farms to safely and affordably gain the cash flow they require to grow their business. Farm asset finance can help farmers to afford the new equipment or vehicles they need to work more efficiently, and farm asset refinancing allows farmers to free up money tied up in unused assets.

To find out more about the farm funding solutions available from Richmond Asset Finance, give our team a call on 0113 288 3277.

How farm finance products can help farms become more sustainable

15th April 2019 / admin / Comments Off

The farming industry is under increasing pressure to operate more sustainably. Here’s how farm finance products can help farmers to achieve this goal.

Sustainability, climate change, and animal welfare are all hot topics. As vegan and vegetarian diets grow in popularity, more people are becoming interested in the environmental impact of agriculture, particularly the farming of cattle for beef.

What is sustainability?

To be sustainable is to look after the environment and renew resources at a rate equal to or in excess of the rate at which you use them. In order to become more sustainable, farmers must adopt environmentally friendly practices and find ways to improve the efficiency of their processes.

Which areas of farming can this be applied to?

When looking at the way you run your farm there are likely to be many areas where you could make improvements to become more efficient and sustainable.

Just a few areas you may identify include:

Feeding livestock.
Breeding livestock.
Manure management.
Looking after soil.
Tools, tech, and machinery.

Tools and equipment for agricultural sustainability

As well as changing and improving existing processes, farm machinery and equipment play an important role in a farm’s sustainability.

If you are using old or outdated machinery, upgrading could lower your farm’s environmental impact. Modern machinery is often built to be more intelligent and efficient with sustainability in mind.

Just a few sustainability problems that modern machinery can solve include:

Machinery that produces fewer emissions.
Machinery that consumes less power and uses fewer resources.
Machinery that can apply chemicals with greater precision.
Micro-sprinklers and drip irrigation technologies to save water.
Smart technology like crop sensors and drones to improve efficiency of processes.

Farm finance products to fund sustainability

Adopting modern farm machinery isn’t just about being kinder to the environment, it also makes good business sense. Working smarter and more efficiently will also help to save you time and money, making modern farm machinery and technology an excellent investment for the future.

If you need help financing new farm equipment, then there are a variety of farm finance products on the market to choose from. The farm finance product suitable for you will depend on your current situation.

Get in touch with our team of specialists here at Richmond Asset Finance for free farm finance help and advice by calling us on 0113 288 3277 to discuss your requirements in more detail.

Agricultural equipment that can help to lower ammonia emissions

10th April 2019 / admin / Comments Off

Farmers are being encouraged to invest in new agricultural equipment and tools to help them to lower their ammonia emissions.

Particulate matter is a type of airborne pollution made from a mixture of small solid particles and liquid droplets including organic chemicals, dust, and acids.

Particulate matter can be inhaled and has been linked to several health problems as well as damage to wildlife habitats and wild plant species.

Agriculture creates a large amount of ammonia emissions, which play a key part in the formation of particulate matter. Levels of ammonia and particulate matter in the atmosphere are monitored closely by DEFRA.

What causes ammonia emissions?

According to Farmer’s Guardian, around 87% of the UK’s ammonia emissions come from farming activity.

Just some of the agricultural causes of ammonia emissions include:

Manure application.
Livestock housing.
Sewage sludge application.
Manure storage.
Fertiliser application.
Livestock grazing outdoors.

Tackling ammonia emissions

Ammonia emissions from agriculture have been in the spotlight recently after the government launched aClean AirStrategyearlier this year to cut air pollution.

Farmers are being urged to invest in agricultural equipment and machinery that will help them to reduce their ammonia emissions.

To reduce emissions farmers need to find ways to retain the valuable nitrogen found within manure and slurry and then apply it using low-emission techniques.

Just a few types of agricultural equipment that can be used to lower ammonia emissions include:

Covers for slurry tanks and solid manure.
Specially designed livestock housing that reduces the amount of slurry exposed to air.
Low emission spreaders.

Funding agricultural equipment to lower ammonia emissions

You may be able to receive help and funding towards the costs of agricultural equipment to lower ammonia emissions through government schemes like the Clean AirStrategy, Countryside Stewardship Scheme, and Countryside Productivity Small Grant Scheme.

If you don’t qualify for funding or require further financial help, then Richmond Asset Finance provide a range of farming finance products to help you acquire the agricultural equipment you require.

To discuss your requirements in more detail, give our team a call on 0113 288 3277.

Why are so many UK farmers choosing to diversify?

30th March 2019 / admin / Comments Off

In today’s uncertain economic climate, many UK farmers are choosing to diversify their businessto boost their income.

Government figures show that 62% of UK farmers are now diversifying into other business opportunities to top up the income they make from traditional farming.

According to Farming UK, of the 62% of farmers that have diversified, 94% of the schemes have been financially successful.

So, if you’re not yet diversifying, it may be worth doing some research and speaking with an expert about rural finance to find out if you can get some help with financing your diversification scheme.

Why diversify?

With over half of those farmers diversifying reporting that the income from their alternative business has become ‘vital’ or ‘significant’ to their farm, can farmers afford not to diversify?

Key factors that are pushing farmers in the UK to diversify include:

Disease in farm animals.
Increased competition.
Falling price of milk.
Subsidies falling away.
Brexit uncertainty.

As with any business, it makes sense for farmers to avoid putting all their eggs in one basket (excuse the pun).

With many farmers owning a substantial amount of land, it makes good business sense that they use all land and buildings owned to their full advantage. Diversifying into alternative markets like leisure and tourism and renewable energy allows farmers to boost their income.

Rural finance to aid diversification

To find out if you can apply for rural finance to help with your diversification scheme, get in touch with our team here at Richmond Asset Finance to discuss your plan in more detail.

Why Is The Machine Finance Market Growing?

19th February 2019 / admin / Comments Off

Machines are critical to growth in the manufacturing sector but they are often expensive and can eat into business profits without some form of financial help.

Traditionally business owners turn to the bank to provide straightforward business loans to help if there is insufficient cash in the business to purchase machines. Even if there is enough cash to buy a machine, a loan can be a more sensible way to buy equipment particularly if there is risk attached in making large investments as there often is in business. However, business loans from banks also come at a cost and interest rates can be high.

Having multiple loans can also leave a business vulnerable in a downturn and restrict any cash flow available to grow the business. Machine finance is growing in popularity because it unlocks funding when you need it.

So if your business requires a new machine that will cut down the amount of manual labour required to get jobs done such as a CNC machine, machine finance can help you acquire that machinery at a minimum upfront cost.

This means you get the benefit of improved efficiency and profitability while spreading the cost. It can also be tax efficient now that the government has increased the annual investment allowance. So it comes as no surprise that the machine finance sector has grown 9% year on year.

Machine Finance Sector Up 9%

15th February 2019 / admin / Comments Off

Any thoughts of the manufacturing sector being hit by the uncertainty around Britain leaving the EU Certainly hasn’t been felt in the machinery finance sector where growth has hit 9% compared to the previous year.

Analysts say the UK asset finance market as a whole look set for a record period of growth in 2019 on the back of a broadly stable 2018. Last year saw a mixed pattern of growth in some sectors and declines in others. IT asset finance for example saw a fall of 32% while other sectors such as machinery and business equipment finances saw increases, the latter seeing 8% growth in the same period.

Machinery finance may well see further year on year growth in 2019 if manufacturing receives a boost and more business owners take advantage of the temporary tax benefits that will come as a result of taking advantage of new Annual Investment Allowance limits.

Machine finance can be particularly useful for investing factory machinery such as CNC machines, which can be expensive to purchase outright. Machine finance provides a way of investing in machinery without having to risk huge amounts of money which can be better used in expanding business operations, research end development.

Are You Looking At The Right Asset Finance?

18th January 2019 / admin / Comments Off

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.