Frequently Asked Questions |
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Frequently asked questions
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Do you have a question? You may be able to find the answer below. Alternatively, pick up the phone and call us. We'd be pleased to have an informal conversation. |
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What is asset finance? Asset based finance is an advance that is secured on the asset. You make regular repayments over an agreed term. Because of the security, asset finance is often more flexible than other forms of finance and you can fund up to 100 percent of the asset value in certain circumstances. The repayments can also be matched to the life of the asset to suit you. |
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What assets can I finance? Any assets that help your business to run and grow successfully can be financed.
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| Why not use my own working capital? With a low interest rate environment this is a consideration. You will be able to claim the capital allowance and will take title to the equipment. However, spreading the cost of an asset over its useful working life makes sound economic sense. It also enables you to use the cash available to invest in other key business areas which will support growth. | |||||
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| Why don't I borrow from my bank? You can, but a loan from the bank will reduce your ability to raise funds for other purposes while the loan is outstanding. Asset finance protects bank credit lines needed for working capital, debtor finance, and expansion. | |||||
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| Do I have to place a deposit? This will depend on the provider and the type of asset you want to purchase. Many providers offer flexible structures which match your cash flow and the asset life and asset use. It also depends on the level of security required. | |||||
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| What information do lenders require to make a credit decision? It depends on how much you want to borrow and for what purpose. Most finance salespeople will be familiar with the underwriting process and should discuss your business in detail to get a better understanding of your needs. They can then package your credit application in the most appropriate way to give you best chance of getting an acceptance from the underwriters. | |||||
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| Can I finance assets from overseas suppliers? Yes, potentially. Providers should try to be flexible and provide solutions-based finance. This is a complicated area, so it's important that you contact your provider find out what's possible. | |||||
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| Does my business need historical profits to raise finance? This will depend on the provider. Most providers will look at the credit history of the business and analyse key financial ratios trends. They will also want to understand your plans to help satisfy them that you can meet your obligations under the terms of the finance agreement. Repossessing any asset is always seen as a last resort although many providers do have good re-marketing capabilities should they need to enforce this security. These providers will often base part of their lending decisions on the asset particularly if they are specialists in financing that type of equipment. | |||||
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How quickly will I get a credit decision? Each decision is based on your own situation, but for proposals under £50,000 usually within one working day. Larger, more complex transactions will naturally take longer. |
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