Asset FINANCE FOR YOUR FUTURE INVESTMENTS
Asset finance is often a necessary requirement for any business looking to increase their turnover from investing in new ventures, upgrading systems or vehicles, and office requirements. To lay their existing assets on the line as collateral, the business can lend against the value of the asset to free up some cash. Interest is paid, but should the loan not be repaid within the signed time-scale then the asset is taken in lieu of payment.
In order to afford expensive assets or to invest in new property, to give the lender some assurance, the company must offer up something of high value to place against the loan. It’s similar to a secured loan but it’s not generally a property that is put up, it could be computers, vehicles or anything of high value. It acts as security against the loan and that’s why asset financing is so popular in the UK, as both lender and lendee are confident that the outcome will simply be the repayments in cash.
There are tailored finance solutions for assets, and as it’s dependent on your business objectives, you should have a business plan for the cash that you receive, in order to make the most of it and make more money. Laying an asset on the line for your business objective is not only good for the lender, but it gives you something to work towards not losing and making the most of your venture.
BENEFITS OF ASSET FINANCE
There are many ways that asset finance can be a good move for your business, and the main point is that you get cash in advance for putting up the security in terms of an asset.
Let’s say for example, you need £20,000 and you have vehicles valued at £30,000. You offer the vehicles as security. You pay interest on the £20,000 loan over a set term that you are happy with. You get the cash quickly, and invest in whatever new business venture, expansion of existing business or upgrading systems or materials. You gain more business from that cash injection, and can easily repay the loan.
Remember, though, if you cannot keep up with the repayments then the business commercial vehicles will be taken as payment up to the fair value of them against the cost of the loan.
WHO SHOULD USE ASSET FINANCING
Any business that needs money to invest in new items, new sales tactics, new marketing lines or equipment and has assets to put up can take part in asset finance.
As long as you have a plan for the money and for the repayments, then you should go for it and make the most of today rather than waiting for a business direction that might take months or years to get to.