Asset Finance is a type of funding that various businesses use to get the equipment, machinery and vehicles they need without having to worry about the upfront costs. Businesses can also use Asset Finance to release cash that's tied up in the value of their current assets, this is called Refinancing.
Business' that require equipment, machinery and lorries can raise finance in a number of ways.
What you need to know
- What is the best way to secure finance against existing assets or new purchases.
- You can look at re finance of existing assets
- Raising finance for new machinery
Speak to someone today
If you would like to speak to someone directly today,
please give Jonathan a call.
Available Monday - Friday 9am to 6pm
Obtain your Permission
Asset Finance is a process that requires guidance because you are taking a line of credit against some existing assets by re finance or yet to be purchased assets so it is a big decision to make.
As a result of your enquiry we will telephone you to assess what you are looking to achieve.
Agreement / Paperwork
Upon your agreement we will discuss your case with the best suited company concerned, give you initial feedback regarding the figures concerned and with your agreement submit the enquiry to the company concerned.
The company that we have recommended to you will then deal directly with you start to finish and initially telephone you to confirm what we have discussed and then go through their process and timeframe with you. We will oversee all and ensure a smooth process start to finish. There are no hidden fees or charges, it is all very clear and transparent.
Once your business need is completed and set up then unless you require any of our other services we carry out 6 monthly reviews to keep in touch but you know where we are.
Be advised that we do not cold call, we do not mail shot, we do not pester people, we do not force people to make decisions they do not want to. Everyone who we see is as a result on an enquiry led by them, meaning that the potential client has made the decision to look at and in most cases transfer their Final Salary Scheme or Personal Pension, or SIPP into a new arrangement be this a new Personal Pension or Annuity or Flexi Access Drawdown arrangement. Whilst we are not order takers, the point of this declaration is that we do not force or push people into making such decisions. We still go through a lengthy advice process to check viability, attitude to risk, product and fund selection and point out all of the pitfalls and benefits either way. In some cases we do not agree and this is pointed out to clients. We do not transact insistent client business.
How much can I borrow?
The borrowing amount varies depending on if your company is a Limited Company or Unlimited Company and what your figures are.
If you’re a Limited Company, you can fund assets from £5,000 to £500,000.
If you are an Unlimited Company, you can fund assets from £25,000 to £500,000.
And for any one customer, you can lend up to £1 million.
Some reasons you should use us
- Access to our initial advice and finding a suited lender for your requirements
- Only the best brokers and product providers used to handle your application
- No hidden extra costs, all fees and charges fully disclosed at the outset
- Flexibility of product and tailored to your needs
- Extensive Industry Experience
- We are totally Independent, Directly Authorised Advisers.
- We are friendly and talk plain English and no waffle.
- No pressure selling from us.
Selective invoice finance is quite different from other types of invoice finance
It does not involve an agreement for your whole sales ledger so you can choose which individual invoices you would like advanced. This in turn gives you flexibility to help your cash flow by selling individual invoices which speeds up payment and helps with cash flow.
As you are financing on an individual invoice basis you could get a higher rate of return from the invoice and then pay the fee so on a transaction basis it is much more simple than invoice factoring or invoice discounting.
Probably most importantly having single invoice finance the lenders risk depends on your customers rather than on your own business. This means that this type of invoice funding is aimed at established businesses that trade with creditworthy customers. If your business has a healthy turnover, a few years of trading history and invoices are generally large single invoice finance should be available to you. If you are a startup other types of invoice finance could be available such as Invoice Factoring or Invoice Discounting.
What is Asset Finance?
Asset Finance is straightforward in how it works. Typically, the lender will pay for the asset upfront so you don't have to and then you'll pay a recurring fee for a set period of time to use the asset.
Here at First Place Financial Ltd, we arrange via our panel of lenders the two most widely used types of Asset Finance which are Lease Financing and Hire Purchase (more about these below).
What is hire purchase?
Hire Purchase gives you the option to purchase the asset for a small fee at the end of the agreement.
With Hire Purchase, you generally pay a higher amount upfront and then the remaining cost of the asset is split and repaid at a pre-agreed fixed-rate of interest per month until the end of the agreement.
At the end of the agreement, you will be given the option to purchase the asset outright for a small fee sometimes known as a balloon payment.
What is lease financing?
With Lease Financing, the funder would purchase the asset and you would have use of the asset during the lease.
Essentially you would select the asset you need and a finance company would purchase that asset. You would then pay a series of instalments for the use of the asset.
With Lease Financing, you pay a lower amount upfront than you would for Hire Purchase. Then the remaining cost of the asset is split and repaid at a pre-agreed fixed-rate of interest per month until the end of the lease. You can also keep the asset at the end of the primary lease period, however, this is subject to an annual rental.
What is better for my business?
Let's take a look at why businesses would choose Hire Purchase or Lease Financing.
Selecting which one is right for your business really comes down to the payment preference.
Businesses will generally opt for Hire Purchase if they would prefer to pay a higher amount upfront. With Hire Purchase, the VAT can generally be claimed back in the normal way*.
Leasing, on the other hand, tends to have a lower upfront cost and the VAT charged with each rental, with the VAT being reclaimed as payments are made*.
*There are different treatments of the products from a tax, VAT and accounting perspective and your advisers will be best placed to let you know how your business will be affected.
We at First Place Financial Ltd are here to help so if you are unsure of the best route to take just complete our contact us section and we will contact you to chat through the options to find out what's best for you.
What is refinancing?
Refinancing allows you to release cash that's tied up in your existing assets.
Refinancing allows you to release the capital you’ve got tied up in your existing equipment for a variety of purposes. Refinancing can help boost your cashflow and it can be provided on both lease and hire purchase agreements even if you have money still left to pay.
Usually refinancing is worked out as a percentage of the assets equity and if you own the asset without finance you will typically be able to get a higher percentage of the items overall value. If you have an asset that you would like refinanced just complete our contact us section and we will contact you to chat through the options to find out what's best for you
How does it work?
Asset Finance helps businesses get the assets they need without the large upfront costs.
Essentially the funder buys the asset which acts as security so you can pay monthly instalments to use/own the asset depending on if you take out a Hire Purchase or Leasing Agreement.
What are the repayments?
With Asset Finance you don't have to worry about the upfront costs and the repayments are really straightforward.
Repayments are monthly with a pre-agreed fixed-rate of interest. And best of all you get to choose what time frame works best for you from 1 to 5 years and in some cases even longer.
We can also tailor repayments to your needs, so if, for example, your business is seasonal, we can look at a repayment plan where we reduce the payment amount during the quieter months.
How soon can I get it sorted out?
It really is as soon as you need it.
Once you contact us we get the ball rolling and can usually get you a decision within one working day. That said, we know that time is sometimes of the essence and we have cases whereby we have been approached in the morning and the business has received their asset by the afternoon. It really can be that quick.