Category: Lease Finance (page 2 of 2)

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.

Can I Get A Small Business Loan For My Start Up?

10th October 2018 / admin / Comments Off

This is a common question asked by many a start-up founder who needs cash to get a business off the ground. The unfortunate reality is, a start-up represents a high risk to most lenders making them reluctant to provide loans to untested business start-ups.

While this might seem unfair, think of it from a lenders point of view. With an established business they will have some track record to go over before making the decision to lend. They will see things such as order books, records of paying customers and so on.

With a start up all they are likely to see is a business plan at best and an unproven business model. While the business might have huge potential in the eyes of the business owner, lenders, particularly those on the high street will be far more pragmatic.

Yet the start up phase is when a business is most likely to need the funding which is why it is important to discover what lenders of all types will be looking for before they offer a business loan.

If your business doesn’t have any sort of track record to rely on, then lenders will look at things such as your personal credit rating. If this is good then it will make you less of a risk as the business owner. Also you could look at alternative sources of finance such as asset finance depending on the assets your business might already possess.

Lease Finance

10th December 2013 / admin / Comments Off

Lease Finance – A flexible way to finance

A lease helps you keep your options open when you acquire an asset, by not committing yourself to ownership. So if it’s flexible financing you’re after, our lease finance facility could be the way forward.

How does lease finance work?

We buy and own the asset and you enter into an agreement to hire it from us at an agreed rental over a set period. This may be a more tax efficient way for you to have use of the asset.

You also have the option to retain use and possession of the asset when the lease contract ends – potentially at a price agreed at the start of the lease period. Alternatively, you can sell the equipment for and on behalf of the leasing company and retain the vast majority of the sale proceeds as a rebat of rentals.

At the end of a leasing agreement, the asset is sold and you receive the major share of the proceeds. As the asset owner we claim and reflect any available writing-down allowances on the asset purchase in lower monthly lease payments.

Finance Lease is different to Hire Purchase. Initially when the asset is purchased, you will only pay the VAT element on the deposit / initial rental that you put down. The finance house will pay the remainder of the VAT on the purchase price. Your monthly repayments are for a fixed period and generally a fixed rate. However, your monthly repayments will attract VAT, which you reclaim in your Quarterly / Monthly VAT return.

However, at the end of the ‘primary period’, you have various options:

Sell the goods to an independent third party and will be offered the majority of the sale proceeds. (Sale price must be agreed with the finance house)
Enter into a Secondary Rental Period and generally pay 1* monthly rental on an annual basis and never own the goods. (*Secondary Rental Period varies with different finance houses. The star denotes that it is not always 1 rental.)
Return the asset to the finance company.

Key highlights:

Low up-front costs – you pay a small deposit and can use the asset immediately
Flexible repayment structure – rental payments can be tailored to match your cash flow
Fixed or variable interest options – you decide which suits you best
Tax advantages – as well as reclaiming VAT, you may be able to claim capital allowances and also offset repayment interest against profits (special rules apply to cars)

Assets you can typically acquire with lease finance

Fork lift trucks / aerial work platforms
Construction equipment
Cars and vans
HGVs
Buses and coaches
Plant and machinery
Agricultural equipment
Information Technology & Office Equipment
IT equipment

Unsure whether leasing is beneficial for your business? Call us today to discuss your requirements and we can inform you of all our asset finance options and can come up with a solution to best suit your business needs.