Category: Asset Based Finance (page 9 of 10)

Vets Equipment Finance

5th May 2016 / / Comments Off on Vets Equipment Finance

If you run a veterinary practice today, you will need all kinds of equipment to ensure that things run smoothly and efficiently in addition to ensuring the best standards of care.

Of course all the equipment you need these days doesn’t come cheap, which is why finding ways to finance your assets can be helpful if not essential. The great thing about asset finance for vets is, you can use it not only for large expensive items of machinery such as x-ray processors but also smaller items such as thermometers and other equipment you might use every day.

Breaking it down in simple terms, there are two main asset finance options for vets. These are leasing and hire purchase.

If you want to keep costs down, leasing can often be the better option and even more so if your needs are short term. Your monthly costs will be less because you aren’t buying your equipment and at the end of the agreement you can simply return it or renew the lease. Your approval rate on leasing will also be higher than for higher purchase.

With higher purchase on the other hand you will eventually own an asset permanently although you will need a higher deposit and the monthly payments are likely to be more. Again approval rates are high for asset finance lending on equipment bought on higher purchase as long as your credit rating is good.

How To Grow Your Business on a Shoestring

4th April 2016 / / Comments Off on How To Grow Your Business on a Shoestring

It’s in every entrepreneur’s nature to want to grow their business, however doing it on a shoestring can be difficult but not impossible.

One of the most important things to think about as an entrepreneur starting a new business is future direction. Are you thinking big? Are you making plans to take the business to the next level?

If you are, then this is an important first step. As soon as you have the vision for where you want to take your business then you will need funds to bring your plans to fruition. This is where a lot of entrepreneurs fail.

They can often end up stuck in a rut without exploring the funding options available and rely on the business itself to generate the funds for growth. Unfortunately as almost every business owner knows, you can’t always rely on sales to fund expansion.

So it is worth considering funding options that will help clear the obstacles to future growth. These can include: 

Friends and family
Many successful business have started with help from friends and family. Just make sure you have a proper agreement set up from the outset in writing, just in case things don’t go according to plan.

The bank
Ok this may not be the best source of funding available. You will have a lot of interest to pay and banks won’t just lend to anyone, but if you can present a strong business plan, then there are plenty out there who will be willing to take the risk even if you are a small business owner.

Alternative business finance
Alternative forms of finance are flourishing. Asset based finance, crowd funding, funding from business angels and so on. You may even get better terms than from the bank with these alternatives.

UK Leads Europe In Asset Based Finance

5th February 2016 / / Comments Off on UK Leads Europe In Asset Based Finance

According to the Asset Based Finance Association (ABFA), the UK currently leads Europe in the support asset based finance provides to businesses.

A recent survey has revealed that asset based finance now supports 15% of all UK company turnover which is 5% more that the average for economies across Europe. The trend towards asset based finance as an alternative to other finance continues to be positive with significant growth in Germany and France tow of the EU’s leading economies.

Both, however, continue to lag behind the UK with France having 11% of business turnover supported by asset based finance and Germany even further behind at 7% less than half the level in the UK.

Invoice finance where companies secure their funding against unpaid invoices continues to make up the biggest proportion of asset based finance in Europe with asset based lending against things like machinery and other assets accounting for 20% and this is an area that continues to grow strongly.

The other countries that are supporting business turnover at a level of asset based finance that is higher than average are Belgium (14.5%) The Republic of Ireland (13%) and Portugal (12%).

The UK is seen as one of the biggest innovators when it comes to alternative finance and now the rest of Europe are beginning to wake up to the obvious benefits it provides to businesses.

New Business Asset Finance Expected To Grow 10% in 2014

14th January 2016 / / Comments Off on New Business Asset Finance Expected To Grow 10% in 2014

The Finance & Leasing Association (FLA) has revealed statistics showing that the asset finance industry has grown for the 25th consecutive month. As a result of this and current market conditions the industry expects further growth of 10% in new business asset finance in 2016.

According to the latest figures from the FLA asset finance relating to new business saw an increase of 3% in October 2015 compared to the October 2014. This represented a total of £2.51bn overall. Car finance was by the far the biggest growth area in leasing with 6% year on year growth recorded followed by IT equipment finance (2%) and plant and machinery accounting for 1%.

IT equipment finance was worth a total of £170m in the 12 months to October 2015 while car leasing finance represented £864m.

The one area that bucked the positive trend was business equipment finance which saw a negative year on year trend, falling by 12%. This meant that the sector was worth £159m overall.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “October saw continued growth across most of the main asset finance sectors, although the slowdown in emerging markets in recent months and falls in commodity prices have hit demand for construction and agricultural equipment finance.”

Asset Finance Now Funding 32% of Business Investment

4th November 2015 / / Comments Off on Asset Finance Now Funding 32% of Business Investment

With the announcement this month that the government are considering scrapping grants for research and development and replacing them with loans, at least asset finance is providing a boost to UK businesses.

According to the Finance & Leasing Association (FLA) asset finance funding is continuing to grow at a rapid rate with August seeing the twenty third consecutive month of growth. Asset finance new business increased by 5% on the previous month which shows that more and more businesses are considering asset finance as a realistic alternative to other forms of business funding.

The percentage of business investment in machinery, equipment and software financed by asset finance currently stands at 32% according to the latest figures available.

Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said

“The revised ONS business investment figures show that the industry’s contribution to the funding of investment is much greater than previous data suggested. The percentage of UK investment in machinery, equipment and software has grown from a low of just over a quarter in 2010 to almost a third in the year to June 2015.”

Aircraft, ships and rolling stock finance and IT equipment has seen by far the biggest increase in asset funding with 119% and 81% increases compared to August 2014.

Record Number Of Firms Using Assets To Raise Cash

6th October 2015 / / Comments Off on Record Number Of Firms Using Assets To Raise Cash

According to new data released by the Asset Based Finance Association (ABFA) a record number of businesses are now using assets to raise cash.

The assets typically used by businesses to raise money include plant, machinery and real estate as firms are increasingly seeking better alternatives to bank loans and overdrafts. Funding that is secured against assets offers businesses an opportunity to borrow money at a cheaper rate because lending is secured. Assets can either be physical or loans can be secured against the outstanding debts owed to a business.

A total of £4.2bn was secured against assets by businesses in the UK, which represents a 9% increase on the £3.8bn recorded in 2014. The overall amount of funding secured by businesses through asset based financing stood at 19.3bn to the end of June 2015.

The figures indicate that businesses are embracing this innovative form of financing rather than relying on other more expensive and less secure forms of lending. While asset based finance can be used to help businesses that may be struggling with cash flow issues, it is also being used as a positive means of driving investment in future growth.

Asset based finance is not just restricted to areas such as real estate, plant and machinery it can also be used to borrow against more unusual assets such as IP and forward income.

Record year for asset based finance

10th July 2014 / / Comments Off on Record year for asset based finance

Record year for asset based finance as businesses step up borrowing against invoices to fund growth

  • Invoice finance shows 29 per cent growth since 2009/10…
  • …contrasting with 19 per cent fall in traditional lending products over the same period

The supply of asset based finance to UK businesses has hit a record high in the last 12 months with an average of £17.5 billion in use at any one time by businesses over the last year*, says the Asset Based Finance Association (ABFA), the body representing the asset based finance industry.

This is 9.4 per cent up on last year’s average and up 29 per cent from the £13.6 billion of asset based finance in use at the height of the recession in 2009/10.

In contrast, the average value of traditional forms of funding supplied to businesses fell business, SME by 5 per cent over the same period**. Net traditional funding to businesses is now down by almost £100 billion since 2009/10, falling 19 per cent from £485 billion to £391 billion.

The ABFA explains that 80 per cent of asset based finance is invoice finance, in which businesses secure funding against their unpaid invoices, while the other 20 per cent represents the fast-growing area of asset based lending, in which businesses can raise money secured against a range of other assets they own, including stock, property and machinery.

The ABFA says that these figures show that invoice finance is now a mainstream funding product for businesses, playing a major role in filling the SME lending gap created as banks remain restricted in the levels of finance they can provide to businesses.

Martin Morrin, Chairman of the ABFA, says: “Invoice finance is playing a bigger role than ever in funding British businesses’ growth, and has truly stepped into the mainstream of business funding.”

“Since the credit crunch, invoice finance has become an even more important source for SMEs for funding as they struggled to access traditional term loans. Now, as the economy recovers, more and more businesses are using it to fund their growth, and that’s pushed demand for funding to levels we haven’t seen before.”

“More and more businesses are now seeing their invoices as a significant untapped asset they can borrow against, and that banks and other institutions actively want to lend against. It has been the business funding success story of the last few years.”

“The Government and the business community have been looking for a new mainstream financial product with the potential to fill the gap created by the continued lack of term lending. These figures show that asset based finance, and invoice finance in particular, is that product.”

ABFA says that many businesses do not realise that the invoices that they have outstanding with customers are often the most valuable asset owned by the business, and that banks and other funders will willingly lend against them. Generally speaking, loans that are not secured against assets have become harder to find over the last five years.

* Year end: March 31 2014. Based on loans outstanding at one time. Source: ABFA
** Average net bank loans outstanding to private non-financial corporations, year end: March 31 2014. Source: Bank of England

[ABFA]

Asset finance drives SME lending

3rd July 2014 / / Comments Off on Asset finance drives SME lending

Asset finance drives SME lending to pre-crash levels

Leasing and asset finance are among the biggest drives of growth in the sector as small firms seek alternatives to traditional bank loans, figures from the National Association of Commercial Finance Brokers (NACFB) show.

A combination of caution from banks, new capital rules making it expensive to lend to SMEs, and firms’ own reluctance to borrow has driven down borrowing levels. But loans secured on assets, leases, invoice finance and vehicle finance have all shot up in the last year.

Brokers with the NACFB arranged more than £1bn of finance for small firms in May, its highest level since the crisis struck. The biggest component was asset finance and leasing, at £230m and up 19.8 per cent on the year. Commercial mortgages were next, raising £225m, up 25.7 per cent on May 2013. And buy to let lending was next at £200m, down from £203m in the same month a year ago.

Growth in Asset Finance

3rd July 2014 / / Comments Off on Growth in Asset Finance

Sharp growth in business use of asset finance

Use of asset based finance by the UK’s biggest businesses has grown by 16 per cent in the past year, from £4.4 billion to £5.1 billion, says the Asset Based Finance Association (ABFA).

ABFA says that this is more than a fivefold increase on the £1 billion in asset based finance provided to big businesses ten years ago, as asset based finance becomes a mainstream method of funding for large businesses.

Asset based finance includes invoice finance, in which businesses secure funding against their unpaid invoices, and asset based lending, in which businesses can raise money secured against a range of other assets they own, including stock, property and machinery.

At the end of March 2014, 315 big businesses in the UK and Ireland were using asset based finance, compared with 277 a year ago, and just 81 in 2004.

Jeff Longhurst, chief executive of ABFA, said: “We’ve entered a new era for business funding, where asset based finance is an everyday part of the commercial finance toolkit for businesses of all sizes.”

“Financing tools like these have already been commonplace in the United States for a long time, and have played a key role in funding the recovery for a lot of businesses in sectors like manufacturing. We’re now seeing big British businesses following their lead, and using asset based lending as a vital part of their growth plans.”

“There are general concerns about the availability of finance for businesses and the consequences this could have for the recovery.  The asset based finance market in contrast – while it has grown sharply-still has unused capacity, and providers are actively looking to grow their lending books.”

[Fleet News]

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What is Asset Finance?

12th June 2014 / / Comments Off on What is Asset Finance?

A Guide to what is Asset Finance

Small business asset finance explained: the different financing options and their benefits, the costs involved and the variables lenders consider

In order for your business to grow, it is likely that you will need to make a significant investment in a new asset. This could include the purchase of new computer equipment and software, new machinery and equipment, or a new motor vehicle such as a van.

As a start-up or small business you are probably looking at the price of your new asset and wondering how you are going to afford the one off, large payment required to make your purchase. This is where asset finance can help.

Leasing and hire purchase

With asset finance packages, hire purchase and leasing, you can breakdown the payment of your assets into monthly bite-sized chunks. This makes the investment much more affordable and has less of an impact on your cashflow.

What is leasing?

Ownership:

With leasing, you are paying for use of the asset and do not own it at any point.

Advantages of Leasing:

  • At the end of the contract you can simply renew the lease contract, or you may be offered to purchase the asset so you become the owner.
  • You will be able to always stay up to date with the latest version of your asset, for instance after an 18 month contract, when your machinery is out of date and the contract comes to an end, you can take out a new lease with the latest machinery that is available. This may significantly impact on the quality of your product/service you can offer to your customer.
  • Some leasing agreements also offer a full service package which can include repairs and replacements, saving you money and time when things go wrong as the leaser will have responsibility for the asset’s upkeep.

What is hire purchase?

Ownership:

Once the contract is fulfilled, you are the owner of the asset.

Advantages of hire purchase:

  • You do not need to take out a loan, overdraft or favour from your family to find the cash lump sum you require up front to pay for an asset – you will be able to pay for the asset in affordable monthly repayments.
  • You do not require any security or collateral to secure an asset finance deal such as hire purchase.
  • Once the contract is paid off, you will be the owner of the asset. This means you can later sell the asset for a lump sum. Remember though, the price will likely be less than you paid throughout the entire hire purchase facility as depreciation occurs and new models of the asset will subsequently have been released. However, you will at least receive some return for your investment in the asset, unlike leasing.
  • Finance charges for assets are tax deductable which effectively means that the tax man is financing some of the asset for you.

What are the costs involved in asset finance?

As highlighted previously, leasing usually only consists of a single cost – the monthly lease. This makes it simple to calculate in your accounts. Hire purchase, on the other hand, consists of a deposit, plus an interest charge which will be calculated and included in your monthly payments.

Poor Awareness Of Asset Finance

12th June 2014 / / Comments Off on Poor Awareness Of Asset Finance
A “lack of basic awareness” of asset based lending among small businesses is costing the UK economy billions every year, says Susan Allen, chief executive of Royal Bank of Scotland’s asset finance arm.

asset financeLast month the Government opened its Funding for Lending Scheme (FLS) to providers of asset finance and leasing, which allow businesses to release cash from machinery. This was a welcome move to provide attractive rates of borrowing to companies which urgently need to update ageing equipment, or obtain new technology.

Lombard, which is RBS’s asset finance arm, has conducted research for the second year running on usage and awareness levels of asset finance. Our survey of 600 UK companies, mainly small and medium-sized companies, exposes worryingly low levels of investment. UK firms have limited awareness of asset finance, and the consequences are stark. Companies are turning down business because they do not have the right machinery or technology in place. A conservative estimate of the loss of potential business to SMEs in the UK is upwards of £5.4bn.

A lack of basic awareness of this form of lending – our survey shows two-thirds of companies do not know of its existence – needs to be urgently addressed. Information direct from lenders, as well BIS and the industry’s body, the Finance and Leasing Authority (FLA) needs to be targeted to the right SMEs. But there is also a role for the accountants and advisers, who are often the main source of financial information for small companies.

There is also a need to update the image of asset finance to meet the requirements of today’s customers. The traditional image of capital goods – plant and machinery – paints only part of the picture. Though manufacturing remains the biggest sector we finance, and we have seen lending increase in this area by 66pc over the past year, IT and technology is the area of highest demand amongst the companies we surveyed. Innovative finance options are developing to cater for this demand, such as a recent software deal to protect a company’s intellectual property rights.

We also recognise that banks need to improve how we reach out to customers. At RBS, for example, we are piloting a scheme to streamline the guidance and processes for customers to provide access to the wide range of finance options available. This is crucial because our survey shows that nearly two-thirds of businesses are paying for capital expenditure from their own funds. This will be the right option for some, but in many cases alternative sources to finance assets are less risky and better value for money.

This matters because the profits in companies which are investing are growing or remaining stable. Meanwhile, UK companies which are turning down contracts rather than investing in capital assets, are finding themselves with higher maintenance bills, and unreliable machinery.

One of the biggest barriers we need to overcome is a lack of confidence in the economy, which leads to caution. Companies are often choosing to sit on their cash, and protect what they have. This protects jobs, which is welcome, but it does not create new ones, or get the economy moving.

To achieve this concerted effort is needed across the board from the industry body, banks and advisers. This includes ensuring that awareness levels are raised, as well as facilitating take-up of time-sensitive policy measures designed to encourage capital investment. In addition to bringing asset finance under the FLS, the Government has recently increased the Annual Investment Allowance to £250,000 on capital expenditure until 2015, meaning companies get generous tax breaks for investing. We need to make sure companies and their advisers are familiar with the advantages these measures offer.

The IMF’s latest annual health check on the UK economy warns that the long-term stagnation in the economy risks “a permanent loss to productive capacity”. Should companies use outdated equipment for too long, not only does the machinery eventually wear out, but the experience and skills associated with new technology are lost too. Contracts which could have catapulted a business to the next level and helped them access new markets may be permanently lost.

It is not just Germany which is investing far more than us – it is Turkey, Mexico and Italy. Many countries easily outstrip the UK’s rates of investment in specialised production machinery and the competition is fierce. We need to get from the back foot to the front foot – and fast, which means everyone playing their part to stimulate the growth that the economy desperately needs.

Susan Allen is chief executive of RBS’s Customer Solutions Group.

[Telegraph]

Business confidence at record high

3rd February 2014 / / Comments Off on Business confidence at record high

A survey of UK business confidence by the accountancy industry body the ICAEW has recorded its highest reading yet – although a lack of export growth is giving cause for concern.

The construction sector is experiencing a strong recovery – although it has not yet returned to pre-crisis levels

The survey, which is produced with Grant Thornton, said confidence has increased for six quarters in a row.

The report is the latest to suggest the economic recovery is well established.

However, ICAEW also said there were concerns about the structure of the economy as export growth had failed.

Stumbling blocks

Their Business Confidence Monitor (BCM) said businesses reported the fastest investment growth since 2008, but growth in exports is expected to fall back.

Michael Izza, chief executive of ICAEW, said: “The export figures are disappointing and show that the government’s strategy is not working.

“We would like to see an increase in export guarantees to match the scale that German companies benefit from.”

As well as continued weak export growth, the BCM found other stumbling blocks for the economic recovery included skills shortages.

Its survey suggested the recent positive trend shown in the official employment numbers would continue, with respondents returning to job creation.

The brightest sectors were construction and banking, with confidence sharply higher among builders although output remains below its pre-crisis peak.

The latest reports from a string of housebuilders have shown buoyant sales – and profits – as government initiatives, such as Help to Buy, which is designed to help buyers of new properties, underpins demand.

Among bankers and those in the insurance industry confidence was at a record high, as they continue to recover from the aftermath of the financial crisis.

The survey found turnover and profit growth both picked up and business expect this to continue for the rest of this year.

[BBC News]

There’s no quick fix for the UK’s personal debt crisis

23rd January 2014 / / Comments Off on There’s no quick fix for the UK’s personal debt crisis

Welfare changes mean many councils and housing associations now view debt as a welfare issue rather than a money management problem

It’s Debt Awareness Week. The irony is, once you’re in debt, you’re actually very aware. Continual reminders and calls normally mean you can’t forget or escape your situation.

Evidence of the impact of welfare changes suggests that actions are being taken early on council tax and rent arrears. We recently dealt with a client whose medical certificate had been lost by the jobcentre and so had her benefits cut for four weeks until they found it. During that time the council sent bailiffs to her house for rent arrears. She was lucky that after appeal the additional charges weren’t added to her bill.

Many councils and housing associations now view debt as a welfare problem rather than a debt and money management problem. Resources that could be spent on specialist debt advisers are being shifted to welfare rights.

The root causes of debt have always been the same: changes in circumstances/income and irresponsible borrowing or lending. These are not caused by high-cost credit, welfare changes or low wages but they are made worse by it. Few policy responses have tried to address each of these issues so I can suggest a few here.

Changes in income generally occur when you move home, apply for changing benefits, or start – or lose – a job. Mainstream debt awareness would provide mandatory access to support at these key moments. Being made redundant should include free access to debt advice. Timely intervention can make you “debt aware” before you need to be.

There is no full-proof way to stop someone lying or borrowing irresponsibly, but what’s clear is that having faced legal action there is often no way back. It is unsurprising that people using high-cost credit do so because no one else will lend to them owing to adverse credit histories. That’s not a route back, it’s a route for a life of debt.

Much has been discussed about high rates of interest but the reality is that most problems are caused by people being lent to irresponsibly – by mainstream lenders as well as sub-primes that fail to check potential borrowers’ income or financial commitments. This is a recipe for disaster, as many borrowers are finding. Sadly the burden of the impact falls on them much more than the creditor. The role for an affordable lending principle and sharing the impact more equally is more important than ever before.

Tackling the personal debt crisis in the UK has no short quick fix. It requires a commitment of epic proportions by all parties – creditors, borrowers and regulators – to change their behaviour and give people a way out.

[The Guardian]

Happy New Year

7th January 2014 / / Comments Off on Happy New Year

Happy New Year everyone from all us here, hope you had a good holiday and are ready for the year ahead!

We were working over Xmas & always readily available to contact but we went back into the office yesterday. Apparently yesterday was suppose to be one of the most depressing days of the year, but we were happy enough!

We’re looking forward to the year ahead with December being a great month for us and lots to come back to in January. We really want to make 2014 the year for Richmond Asset Finance! With lots of exciting things planned and coming up, we’re the ones to watch.

Are you in need of asset finance for your new 2014 business? Or have you had some difficulties over the festive season and need some refinancing options for your business?

If so, we can help! If you want to ask us any questions we are more than happy to help out!

HSBC considers floating UK arm

9th December 2013 / / Comments Off on HSBC considers floating UK arm

Britain’s largest bank has been reportedly sounding out investors in recent weeks to gauge support for the idea to list its £20bn UK banking operation.

HSBC is considering floating its UK arm, ahead of new regulation that demands banks ringfence their retail banking operations.

Britain’s largest bank has been reportedly sounding out investors in recent weeks as to whether or not they would support the project.

There have also been informal conversations at board level to gauge opinion on the idea, the Financial Times reports.

The newspaper reports that people familiar with the matter, which is still in the early stages, have said the most likely plan would be to list a minority stake of up to 30pc in the UK retail and commercial banking operation.

Investors have estimated that the UK arm could float with a total market value of roughly £20bn.

The lender is said to be considering the IPO ahead of the incoming Vickers rules which will demand that banks ring-fence retail, which includes customer deposits and small business loans, from investment banking activity. While a formal separation is not required, experts have suggested that the bigger banks could go that one step further and completely spin off their retail unit.

“Given the trouble you have to go to to establish a self-contained operation, with its own capital and governance, you might as well go the whole hog and spin it off,” said one executive who knows HSBC well.

While the bank may be looking into floating its UK arm, the FT reports that its sources played down any suggestion that HSBC was looking to move its headquarters from London, with any questions of redomiciling “off the table”.

If the bank does go ahead with the stock market listing it would be the latest in a slew of banks to announce their intention to float.

Just yesterday it emerged that OneSavings Bank was examining a stock market flotation next year. The group, which trades under the Kent Reliance brand name, has reportedly started discussions with banks about a potential flotation that could give JC Flowers & Co, run by US financier Christopher Flowers, a way out of its investment in the company.

Meanwhile Lloyds Banking Group is preparing to float its TSB subsidiary next year with a valuation in the region of £1.5bn to £2bn, and Royal Bank of Scotland is planning to float a new challenger bank under the revived Williams & Glyn’s brand in late 2015.

[BBC News]

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