Category: Asset-Based Finance and SMEs (page 6 of 7)

Asset Finance New Business Rises 9%

5th January 2019 / admin / Comments Off

According to the most recent figures released by Finance & Leasing Association (FLA) new business in the asset finance sector increased by 9% year on year in the month of October. This indicates that Brexit uncertainty hasn’t put off firms looking to use asset finance to grow and develop their businesses.

With asset finance covering several sectors, some areas have shown even more spectacular growth than the overall figure suggests. Machinery finance for example showed growth of 16% compared to October 2017 while business equipment finance was up 29% which is nearly one third up. The commercial vehicle sector also saw an increase of 23%.

These figures represent a strong end to the 2018 which began with similarly positive increases in new business in the construction and agricultural asset finance sectors. The asset finance sector is on course for another record-breaking year which will come as welcome news as bank lending to business continues to show a decline in loan approvals across much of the UK.

Despite the good overall news, technology equipment finance saw a fall in new business which pushed the overall figure down. It will be interesting to see if growth in new asset finance business is maintained in 2019.

Why use an Asset Finance Company for Funding?

29th December 2018 / admin / Comments Off

The asset finance market continues to grow as business owners wake up to the benefits this form of lending. So why should your business consider asset-based finance and what benefits can it offer over traditional forms of lending?

One of the major benefits of asset finance is that it not only provides finance for a business, it also helps fund the equipment needed to expand or improve productivity.

One of the major hurdles for owners of startups and small businesses is having enough finance to scale up their operations. Equipment is generally expensive and if this equipment is purchased it often takes vital funds away from other areas of the business.

Spreading the cost of this equipment using asset finance is business friendly because it allows assets to be used to generate income freeing up cash to be used in other areas of business development.

Asset finance is provided by specialist asset finance companies and the process is often fast and straightforward. While banks will be demanding in the amount of information, they need due to the risks involved with traditional lending, the risks with asset finance are lower reducing the time it takes to put the funds in place.

To summarise, asset finance companies offer an attractive alternative to traditional lending by using assets to free up and maintain cashflow allowing business owners to expand and improve their operations.

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.

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.

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.

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.

What Is A Bridging Loan?

28th September 2018 / admin / Comments Off

Many business owners unfamiliar with the various types of loans out there will ask the question what is a bridging loan? Here is a brief guide to bridging loans and how they can be used to help your business.

The best way to think about a bridging loan is to imagine a bridge that allows you to get from one place to another. The main reason bridging loans are used widely by businesses is to get themselves from point A to point B. The finance provided by the bridging loan is the bridge they then step on to get to the other side.

The loan is intended to allow your business to get to the next stage of growth until you can then secure a longer term form of finance to help you reach your business goals.

Bridging loans can be secured much faster than standard loans which means they are great for those businesses that need immediate cash and don’t have the time to wait around too long for decisions.

Bridging loans can be used by property development or other commercial operations as long as there is an exit strategy in place. Another drawback with a bridging loan is the higher interest rates charged on the amount borrowed.

Comparing Business Finance Options

12th September 2018 / admin / Comments Off

If you are looking to grow your small business then the chances are you may need funding to help you achieve those ambitions. Navigating the various options to you, however, is not a straightforward task.

It often helps to first establish what sort of funding is right for your business. There is no one size fits all form of finance and all of them will have advantages and disadvantages depending on the nature of your business needs.

If for example your business is lacking the equipment needed to grow such as needing to invest in machinery but not having sufficient funds to do so, then asset finance is likely to be the better option.

In other cases invoice finance may be the better option if cashflow is an issue and you need faster access to working capital.

Some business owners who are not aware of the above may opt for a loan from a bank or other lender which is then paid back over a fixed term.

Less commonly a business angel may be a source of funding but this could come with the drawback of having to give away a percentage of your business in return for the money.

Whichever funding option you go for, it is important to make sure you read the small print and understand what you are agreeing to. Where possible seek expert advice before deciding on which option is best.

Businesses Turned Down For Business Loans Secure £15m of Funding

5th September 2018 / admin / Comments Off

While securing a loan for a mature business in good health is relatively straightforward, for smaller businesses and start ups going to the bank for a business loan can often end in rejection and disappointment.

In the past this would usually lead to business owners giving up on their growth and expansion plans unaware there might be alternative sources of funding readily available. This is why the government came up with a scheme that referred those businesses that were turned down for a bank loan to smaller lenders or companies offering alternative sources of finance such as asset finance.

The referral scheme was introduced in November 2016 and according to the government it has been successful in sourcing £15 million of funding for small business with loans ranging from £100 to £1.3 million.

Such is the demand for funding in the small business sector, the amount loaned via the referral scheme quadrupled in its second year with 670 businesses benefitting from the extra funding in the last 12 months alone.

These results while amounting to a small proportion of the amount of money being lent to businesses each year show just how many businesses might not have received the vital funding they needed to develop.

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

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.

Increased Demand Predicted For UK Business Finance Scheme

10th October 2017 / admin / Comments Off

According to statistics 71% of business owners will only try one lender when seeking finance for their business. This means that many of those businesses could be missing out on potential sources of alternative finance.

A government scheme introduced in November last year hopes to solve this problem for business through a bank referral scheme. The scheme encourages banks to pass on the details of applicants who failed to secure funding to alternative providers.

This effectively gives those businesses a second chance to secure alternative finance and it appears a growing number of those businesses are benefiting as a result. More than 8,000 businesses were referred via the scheme in the first 9 months following its introduction. It has to be said, however, this still represents only a small minority of the 50,000 businesses turned down for loans each year in the UK.

The availability of finance for businesses to fund growth and expansion is extremely important to the UK economy and any initiative which provides more options to businesses to secure that funding can only be good news.
The key to the success of these schemes is awareness and by encouraging the banks themselves to help in the process, the whole process for SMEs is set to become a lot less daunting for SMEs.

Strong Growth For Asset Finance in Q1 2017

10th June 2017 / admin / Comments Off

Economic forecasts may have been gloomy in the first quarter of this year but the Asset finance market appears to be bucking the trend with promising results for asset finance new business in Q1 2017.

According to the latest data released by the Finance & Leasing Association (FLA) new business in the sector increased by 9% overall in the first quarter of the year compared to the same period last year.

The results show that more and more businesses are continuing to opt for asset finance over other sources of finance to invest in new equipment and machinery.

Results from the agricultural and construction sectors were even more encouraging with the former seeing growth of 43% and the latter seeing 23% compared to the same period a year ago.

While new business growth for asset finance in business equipment was less impressive at 2% it still indicates that growth is strong overall and asset finance growth is not just confined to the agriculture and construction industries.

Economists say this quarter’s strong results matched improved expectations for business investment in the Bank of England’s May inflation report.

If you would like to find out how asset finance can help your business contact us today.

Clarity Needed On Diesel Cars…

11th May 2017 / admin / Comments Off

…To Prevent Uncertainty Over Asset Values

Diesel cars have enjoyed a long period of high residual values but this appears to be coming to an end as the government toys with the idea of how to reduce levels of harmful pollutants.

This has led to calls for clarity in areas such as a potential scrappage scheme for older diesel cars and possible restrictions on where diesel cars are allowed to go in city centres.

The future of diesel is currently under threat not only from the rise of electric cars which enjoy considerable tax benefits but even petrol engine cars. The latter once demonised as the primary polluters of the atmosphere and for comparative inefficiency have evolved to become much more economical than in the past. Pollution from petrol cars has also been found to produce less of the particularly harmful substances found in diesel emissions.

All of this of course will affect the value of older diesel cars and possibly a knock-on effect on newer models. The emissions scandal that has recently rocked Volkswagen and continues to rumble on will have done little to inspire confidence.

Continued speculation over which cars a potential scrappage scheme will apply to and when to will also cause uncertainty in the used car market as people start to wonder how much their cars are actually worth.