Category: Asset Finance Benefits (page 4 of 5)

Why SMEs Need Asset Finance More Than Ever In 2017

6th March 2017 / admin / Comments Off

If anyone had a crystal ball back in June 2016, it is unlikely they would have been expecting to see strong UK economic growth by the end of the year.

Fortunately despite a steep drop in the value of GBP and its continuing weakness, the UK economy has been surprisingly robust, confounding the expectations of analysts.

While this is welcome news for most of us, strong economic growth can be something of a double edged sword for SMEs. On the one hand there is the potential to grow the business and take advantage of the positive economic environment.

On the other there is the need to maintain the balance of cashflow and investment in the business. The cost of a sudden increase in new orders can put pressure on cashflow unless business owners can ease this problem with finance.

A range of finance options will be on the table for companies that find themselves in this position but one of the more sensible options is asset finance.

Asset finance can help business owners grow their businesses with fixed periodic payments rather commit upfront cash or apply for an overdraft from the bank.

Why You Should Never Be Too Busy For A Business Plan?

14th February 2017 / admin / Comments Off

If there is one thing that sets apart businesses that succeed from those that fail, it’s a business plan, which is why it’s surprising to find that even some medium sized businesses don’t seem to have one.

Even Donald Trump has a plan even if at times it seems that he doesn’t and it is often when we look back on progress that we see how important those plans were in achieving things.

Without going into the old fail to plan, plan to fail mantra a business plan should include goals that everyone within an organisation is will work towards. It will also include steps on how to achieve those goals based on a realistic assessment of what can be achieved with available resources.

Running a company as any business owner will tell you takes a significant amount of time and effort and planning ahead is often seen as a luxury that is sacrificed to short term needs such as production and chasing payments.

A business can soon get stuck in a rut without planning to the point where it stops growing and things simply chug along. This can be a dangerous time. All businesses need a steady flow of new customers to be healthy.

Acquiring those customers can be difficult of course but a plan will allow you to make an accurate assessment of the resources you need to get them. It might also bring you to the question of finance or how existing assets can be used to finance expansion.

Business Lending To Manufacturers Falls

9th December 2016 / admin / Comments Off

Despite the current low levels of interest rates on loans, lending to manufacturers slowed in the year to October 2016, declining by 5.2% according to the latest statistics released by the Bank of England.

Does this signal the start of a more cautious approach to lending amongst manufacturing businesses post Brexit? It’s too early to say but uncertainty doesn’t appear to be having any impact on consumer borrowing, which increased by 10% in the same period.

Although manufacturing only accounts for a tenth of the UK economy today, the divergence in lending figures suggests that consumers are happy to keep on borrowing in advance of expected price hikes in 2017 when the fall in the value of GBP against the dollar and other currencies starts to bite.

Despite making up a smaller part of the UK economy than it once did, the manufacturing sector may be in a for a tough time due to its reliance on foreign imports. This could be exacerbated further if the government pursues a so-called hard Brexit, which could result in tariffs when trading with EU nations.

Manufacturing wasn’t the only sector to see a decline with total business lending also falling by £8.2 billion month on month. This fall was largely due to a decline in loans to the financial services sector.

How Asset Finance Can Stop Your Business Falling Behind

7th November 2016 / admin / Comments Off

If you want to win in business the most important thing to do is stay in the race.

You hear this all the time from football managers who are under pressure to bring home league titles. Winning is always a case of staying in the race whether that is in the lead or at least keeping in touch with the leaders.

This is sometimes hard to achieve for smaller businesses that lack sufficient cash to purchase the latest equipment they need to compete on a level playing field. The harsh reality is that businesses that have the resources will simply mop up all the available clients if they are able to provide a faster and more efficient service.

The key thing from a business point of view then is to continuously invest in new equipment. However rather than commit lots of cash up front and put your business operations at risk, asset finance is a way to fund the growth of your business without digging deep into your working capital.

Asset finance can be a flexible and reliable way to help you achieve your business objectives without making a huge sacrifice. If you would like to talk over your options with us we will be more than happy to help advise on how asset finance can work for your business.

What is the Annual Investment Allowance?

11th October 2016 / admin / Comments Off

Our clients often ask us what Annual Investment Allowance (AIA) is and why it’s important when we first have a discussion about asset finance. Here’s a brief guide to what it is and how it can help.

AIA is actually a type of tax allowance to encourage businesses of all sizes to invest in new or used plant and machinery to help them grow. The 100% allowance applies to expenditure up to £200,000 during the year of purchase.

This acts as a great incentive for business owners who may be considering investing in say new machinery to improve productivity. However, there are exceptions that are not included in the allowance including land buildings and cars.

If you are keen to grow your business we can advise you on all sorts of ways to use asset finance to achieve your growth ambitions. We can also advise on the likely tax implications and perhaps reveal some allowances you may not have been previously aware of.

Every business situation is unique and the process depends on whether you intend to buy or lease and the amount of finance you need. Asset finance can be used to acquire a new fleet of vehicles or upgrade your IT systems. Whatever your requirements, our advisors will be happy to talk to you.

Asset Finance News You Might Have Missed Over The Holidays

12th September 2016 / admin / Comments Off

August is a usually one of the quitter months in the business calendar, however this year there have been a few things happening in the UK asset finance industry you may not be aware of.

Far from taking it easy over the holidays industry regulators have been busy finalising reports and consultations which will have implications for the asset finance industry.

One important announcement came from the Bank of England which announced that it would introduce a new scheme to replace Funding for Lending. The new scheme called Term Funding Scheme will involve lending money to banks on the understanding that banks will continue to up their lending to businesses and households.

Post-Brexit, the economy needs all the help it can get to try and stave off a slide into recession as uncertainty over the UK’s trade relationship with Europe continues. While the fuss over Brexit seemed to have died down a little in August as everyone waits to see what the outcome will be, this may well be the calm before a storm that is likely to be felt in all areas of the economy.

One other piece of news was a HMRC proposal to scrap certain salary sacrifice tax benefits which includes the possibility that car salary sacrifice benefits may be withdrawn.

Benefits gained from pension saving, childcare and the Cycle to Work scheme will remain eligible under the new proposals.

What Type Of Asset Finance Is Right For Your Business?

11th August 2016 / admin / Comments Off

Asset finance is an umbrella term that covers a variety of options for businesses that need to protect cash flow or find ways to buy new equipment and machinery without the high initial costs. So what are the options for businesses and which one is most likely to suit you?

HP or lease purchase
If your aim is to buy equipment for your business and eventually own it outright, then HP or lease purchase is a good option. You will be able to pay off the cost either in lump sums or structure repayments to suit your cash flow.

Finance lease
If ownership of equipment or machinery is less of a concern then finance leasing gives you the option to rent it for an agreed period. With this option you can offset your rental payments against your tax liability and less of your money will be committed up front protecting your vital cash flow.

Sale and leaseback
This option allows you to release money tied up in assets. This cash can then be put back into the business.

Operating lease
You may require specialist equipment only for a short period to satisfy the needs of a short term contract for example. In this case an operating lease offers flexibility and you can rent equipment for the period where your business needs it.

Contract hire
This is one way to avoid the costs of owning depreciating assets.

Contract purchase
This works in a similar way to hire purchase but you won’t be required to take the option of ownership at the end of the agreement.

Brexit Increases the Importance of Asset Finance to Businesses

11th July 2016 / admin / Comments Off

The asset based finance industry has been growing at an impressive rate in recent years and Brexit will do little to put the brakes on that growth as uncertainty about the economy weighs heavy on business owners’ minds.

It is now more important than ever that businesses plan finances in preparation for an uncertain future. It is also understandable that many will be cutting back on investment in new staff and acquisitions until the impact of Brexit on the economy becomes a bit more clear.

The immediate impact of Brexit on businesses is for now confined to sentiment. This sentiment may well snowball into a new recession that affects everyone. If one business reduces its investment, then it is inevitable that suppliers will be affected.

For cautious business owners, now may be a good time to look at asset based finance which can help fund new equipment purchases when liquidity needs to be preserved.

The costs for businesses that buy raw materials outside the UK will find that their margins will become more and more squeezed with each drop in the value of sterling. While the pound’s fall in value will benefit exports, it will also push up inflation. Let’s keep our fingers crossed that it will all turn out okay in the end!

How To Boost Your Startup With Asset Finance

6th June 2016 / admin / Comments Off

Owning a startup can become a rollercoaster ride of success and adversity you must overcome to be one of the small percentage of new businesses that make it to their 5th year of trading.

One of the biggest challenges for a startup is having enough cash to continue operating as a business. Often there will be issues with dwindling cash reserves, poor cashflow or both.

Having one or both of these problems together can cut off the life support of any business, so it is crucial to try and establish a solid financial base from the outset so that you can survive any storms that come your way.

Unfortunately it isn’t always that simple. Startups often have the cost of new machinery, equipment or even software eating into business profits. Asset finance solves this problem by turning those assets into cash so that the business can continue trading and costs can be spread over a longer period of time. This provides vital breathing space or more time to become established.

To see how asset finance can help your business contact us today.

Vets Equipment Finance

5th May 2016 / admin / Comments Off

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 / admin / Comments Off

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.

Asset Finance Hits A 7-Year High Among UK Firms

2nd March 2016 / admin / Comments Off

According to the latest statistics released by asset based finance companies, the use of asset finance among UK firms continues to grow with £29bn raised in total in 2015. This was the highest total for seven years.

The 29bn raised was 12% up on 2014 and shows that businesses are increasingly turning their attention to this alternative and often more convenient way to raise funds. The last time money raised through asset finance reached this point was in 2008 when a total of 30.8bn was raised by businesses.

The figures show that while businesses are now exploring other ways to raise money and positive about future growth, there is less trust in the banks when it comes to delivering the money needed to help business survive and flourish.

Access to finance will be important for many businesses who may be affected by the uncertainty surrounding a potential exit from the EU. Those businesses will be busy preparing for various scenarios which include a fall in the value of the pound and potentially more difficult trading conditions.

Asset finance is an excellent alternative to bank lending because it uses the assets a business already has at its disposal to raise funds.

New Business Asset Finance Expected To Grow 10% in 2014

14th January 2016 / admin / Comments Off

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 / admin / Comments Off

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 / admin / Comments Off

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.