The cloud of Brexit has been hovering over the United Kingdom for more than a year now. It has been majorly impacting the driving force of the country’s economy – the small and medium enterprises (SMEs). So if the small business owners have to blend in with the latest trends and attain success, they will have to understand asset financing.
Asset finance is a way for companies to secure different key assets that can help them grow. Business owners have to make fixed regular payments for the use of an asset for an agreed time period (usually between 1 to 10 years). Today, thanks to the alternative finance industry, asset financing has become one of the most accessible and flexible sources of funding available in the market.
The question is, “how can a company benefit from it?”
We have answered some of most common questions related to asset financing for you.
Why Use Asset Financing?
Every business needs equipments for their business operations. Asset financing here is an ideal deal as it helps businesses secure the funding needed against the asset itself. Additionally, the payments made on lease finance are tax deductible, giving the business owners a fortune to save.
Why don’t businesses just pay in one lump sum?
It is important that businesses have enough money to tackle any unfortunate events. With asset financing, you save the amount you would spend on buying assets thus preserving your working capital. It also allows you to have enough money to invest in other important sectors of the company.
How are the UK businesses dealing with the effect of Brexit?
If you observe well, all the UK SMEs are planning to expand and grow in 2018 – there is no downturn to it. There are thousands of companies across the country planning to invest and build a future with nothing but confidence.
How important is it for companies to preserve working capital?
Working capital is the lifeblood of all the successful companies across the globe. Assets on the other hand, we believe, should always work and pay for themselves. In fact, businesses don’t opt for asset financing unless they desperately need it. We strongly recommend every company out there to think about it sooner so you can retain your cash for other essential areas.
What kind of companies benefit from asset finance?
Whether it is a start-up or a well-established enterprise, it is ideal for everyone to have access to top class equipments for attaining success. Business owners are usually attracted to asset financing due to its flexibility in repayments, low rates, tax benefits and a wide range of assets that could be funded.
What assets can be financed?
Any kind of asset can be funded. From traditional assets such as tractors, forklifts, vans and machineries to modern assets such as office or gym equipments, furniture, IT systems and software packages such as CAD, Sage or Microsoft Dynamics.
How easy is it to access – and how long does the process take?
As a matter of fact, asset financing is much easy and quick to access. However, it is also dependent on how well your provider is positioned in the market. There are some who move from initial contact to full activation of transaction in less than 24 hours.
What advice would you give owners considering using asset finance for the first time?
In today’s world, every sector is equally competitive. Thus, you will have to be the best in your industry (at least among the top-list companies). Through asset financing, you get access to every modern technology out there, that you may need to attain growth and success. Businesses opting for asset financing are bound to receive quality experience, services and access to all the equipments that will set you apart from your competition.
What common misconceptions are there?
It is unbelievable to still see that people believe financing is for those who cannot afford to buy things. In fact, the reality is just quite opposite of this. Asset financing is developed for ambitious and profitable companies (big or small) who are seeking growth and are looking to reduce their tax liabilities.
Another misconception people have is that going through a broker is bound to be expensive compared to that of approaching the lender directly.