Benefits of Asset Finance at a glance:
- Spreading cost – asset finance allows you to spread the cost of new equipment, typically over 3 to 5 years and in some cases longer
- Certainty – payments are fixed throughout the contract period.
- Choice – leasing allows you to use the asset over the agreed contract period and return it at the end. Hire Purchase allows you to finance the asset and retain ownership at the end of the contract.
- Achieve growth – asset finance enables you to drive growth and efficiency by investing in new equipment whilst retaining working capital.
Asset Finance is a type of business loan that enables businesses like yours the opportunity to secure additional assets such as vehicles, machinery and equipment without having to purchase them upfront; reducing working capital and the all important cash flow – the lifeline of any business.
Asset finance can also enable your business to release cash from existing assets. Or use those assets as security against a loan from one of our preferred lenders.
Asset finance is an attractive proposition for forward-thinking companies looking to scale their business and increase market share but has their working capital tied up in inventory or other business assets. We’ve found that post-pandemic, many companies are choosing to spread more significant financial obligations over a longer period, enabling them to be more reactive to market trends and be more agile in uncertain times.
Short-term asset finance ensures companies can react quickly to emerging markets and technologies, ensuring they can streamline and implement more efficient protocols and systems to stay one step ahead of the competition.
Whilst a broad category, asset finance relates to the valuable stock, equipment or real estate a company owns.
There are typically two types of asset finance available to creditworthy businesses – Lending secured against existing assets and equipment finance to secure new assets.
In some cases, depending on the type of finance agreement, the borrower can take full ownership of the asset or return it to lease a more up to date version.
An ‘asset’ can be anything business related that holds a value, within reason, of course – whether it’s cameras and lighting rigs in a filming studio or a fleet of vehicles or systems in a distribution centre. As an independent broker spanning decades of experience, helping businesses like yours, we have established a number of preferred lenders who share our visions for assisting businesses to scale and grow; we ensure the best deals are secured in the most efficient and timely manner.
Asset finance is available to any type of business, including start-ups and SME’s. This type of finance is primarily for companies who want to secure an item of high value, in order to enable them to scale and support their business growth, by spreading the cost of the item over its usable life span.
Asset finance is one of the most cost efficient ways of freeing up cash flow and working capital, enabling businesses to scale and pivot when an opportunity arises.
“Plan for the future, and be ready to react now to market changes and new business opportunities.” – CMF Capital
How long is asset finance for?
Asset finance is typically offered from one to seven years, potentially longer for higher value assets. The lender is able to recoup the purchase costs of the asset over the agreed period, plus additional interest. The period of time finance is offered, depends on the longevity and usable timeframe of the product’s lifetime.
CMF Capital’s promise
Our advice to clients has remained the same for many years now. Why spend your own money, restrict cash flow, and let it impact your working capital, when you can borrow at record low rates and have the peace of mind that you have cash in the bank. Ensuring you can scale your business when the opportunity arises, or save it for a rainy day (or when an unprecedented pandemic decides to strike).
Is it the right option for your business?
The reality is asset finance is for the large majority of businesses. There are a number of ways you can best prepare your business to ensure your application is successful and you secure the best rate available.
So, even if you are just exploring options at this stage, we recommend putting a call into one of our advisors who can advise you on how best to prepare your business for an application. Even if it’s something you are considering for the future.