Leasing
By leasing an asset your company has the benefits of owning an asset while a financer retains actual ownership. A deposit is taken at the start of the term with fixed monthly repayments. The lease can include maintenance packages to cover unforeseen problems and servicing costs.
Why do companies do this?
• Removal of stress
• No high upfront costs
• Pivotal to the success of agricultural companies due to value of equipment
Asset refinance
This is where a business refinances equipment they own to release funds that they may use in other areas. For example, if they are a printing company that owns a wide format printer and wants to refinance it, a funder will buy the asset and give them a payment. Then the funder will lease it back to them, so they own the asset at the end of the term.
Why do companies do this?
• Businesses utilise assets they already own
• No need to take on additional finances
Asset Finance in the UK
Asset finance is becoming a popular option to fuel business growth because it allows businesses to acquire the equipment they need without tying up capital or taking on debt. In 2022, there was £34bn in new lending, a 9.7% increase on the previous year.
Popular items in 2023:
• Commercial vehicles were the most common asset acquired by UK businesses, accounting for 29% of new lending
• Company cars accounted for 27%
• Plant and machinery equipment accounted for 23%.
Popular industries in 2023
• Services sector accounted for 65% of total new lending last year
• Construction sector accounting for the second largest proportion at 10%
• The agricultural and manufacturing sectors also accounted for 8% of total lending a piece.
(https://www.financialreporter.co.uk/asset-finance-lending-sees-97-annual-increase.html)
Why Pinnacle Business Finance?
The Term of Finance Available – The time frame in which asset finance is taken over is negotiable depending on the funder. When the term is fixed, the monthly repayments will be set accordingly. The daily, weekly, or monthly repayments will vary depending on the duration of the asset finance. This will be either a balloon payment at the end of the term or owning the asset. This will vary on the type of finance which you decide on. Of course, we will be there to support you through the whole process.
How much it will cost – Asset finance rates can vary depending on a multitude of factors one of them being the lender. Pinnacle Business Finance will secure the best deal using preferential rates and industry experience. We will ask for the required information up-front and take all the hard work away. We will liaise with the funders with whom we have an established working relationship to get the best facility possible.
Understanding Asset Finance
Balance Sheet – You may wish to use the finance to purchase an asset. Although it will initially show as a liability, once repaid, that asset is now on the balance sheet. The balance sheet is incredibly important when assessing the business for asset finance.
Cash-Flow – When leasing an asset, this can improve daily working capital as you, the business won’t have such a significant upfront cost. This will aid the company in planning cash-flow projections showing monthly outlays. When leasing expensive assets, this can bring high maintenance costs, so having a maintenance package included can eliminate unexpected costs.
New Equipment – Obtaining new equipment can be very costly with high initial outlays so leasing the equipment this may negate this.
How do we work?
We have a personal approach to raising funding for SME businesses. We are one of the fastest and most trusted finance brokers in the UK. Putting our clients first is what we do to secure the best business funding. We strive to build long-term, trusted relations. From the moment you get in contact with us, we listen to you and your business. It could be simple such as an unsecured business loan or more complex such as a leveraged business acquisition.
