Tag: Asset Based Lending Record (page 5 of 5)

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to scrap certain salary sacrifice tax benefits which includes the possibility that car salary sacrifice benefits may be withdrawn.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.

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.

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.

Asset Based Lending Record

26th August 2014 / admin / Comments Off

Small businesses fuel record level of asset based lending

A record £18.9bn was borrowed from asset-based lenders in the three months to the end of June, according to figures compiled by the sector’s trade body, highlighting the problems smaller businesses face in obtaining bank credit.

Demand for this sort of borrowing, most of which comes in the form of lending against unpaid invoices, has been fuelled by the problems small businesses face in accessing term loans and overdraft facilities from high street banks.

“We are seeing more and more businesses of all sizes and types taking advantage of invoice finance to fuel their growth, particularly as more traditional forms of lending remain subdued,” said Jeff Longhurst, chief executive of the Asset Based Finance Association, which compiled the figures.

“More businesses are viewing their invoices as what they are – one of their biggest assets.”

However, just under a third of the total was used by companies with an annual turnover greater than £100m according to the ABFA.

The total amount of invoice finance and asset based lending rose by seven per cent during the second quarter of the year, up from £17.7bn in the previous three months, and 10 per cent more than the year to June.

Four-fifths of asset-based finance is invoice finance while the other 20 per cent is lending secured against assets, including inventory, property and machinery.

Despite numerous schemes and near-constant political pressure for banks to improve access to finance for businesses, credit conditions remain tight in the UK.

Asset-based lending has been on an upward trajectory since 2009, during which time traditional lending has fallen by a fifth. But it is still a small percentage of the total borrowing by businesses in the UK, which stands at £384bn.

Its growth has also been insufficient to fill the decline in traditional bank lending, which stood at $492bn in June 2009.

“Asset-based finance is a proven tool for growth, enabling companies to increase their funding as they grow,” said Mr Longhurst.

“What’s becoming increasingly clear is that asset-based finance such as invoice finance in particular, is the alternative to traditional lending for SMEs that the Bank of England and the Treasury have been looking for.”

[FT]