Asset finance
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What is asset finance?
How does asset / equipment financing work?
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Also known as equipment finance, asset finance means taking out a loan to buy or lease physical assets required for running or expanding your business.
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These assets are often high cost, and many businesses do not have the cash in hand to buy them outright .
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From replacing old office equipment to leasing a new fleet of vans, agricultural or other machinery, asset finance can help provide businesses of all sizes with immediate access to the assets they need to drive their business forward.
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Businesses can also use asset finance to release cash that’s tied up in the value of their physical assets. This includes property, as well as equipment, machinery and other assets .
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Also called asset-backed finance or asset refinancing, this enables businesses to raise capital by using existing assets as security for a loan.
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Finding the right lender is important, since some lenders tend to specialise in certain sectors such as construction, engineering, agriculture or vehicles.
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Clear Idea Finance can advise you on finding the best lender for your business, to ensure you keep your rates as low as possible and get the best deal .
Featured case study: Electrical parts wholesaler
An established electrical parts wholesaler reached out to us as they had just won a new contract to supply parts to an electric car manufacturer for their charging ports. The business had just gone through a growth phase, had hired more staff, spent money on equipment and new premises so margins were tight for that financial year which was reflected on their year-end account. Because of their dip in profit that year, traditional banks and alternative lenders wouldn’t consider them for a loan.
They had a signed contract with the car manufacturer confirming the orders and value. We approached the invoice finance companies on our panel who swiftly put a great offer in place, advancing almost 90% of the invoice value, taking the invoice as security and collecting the payment from the car manufacturer once it was due, making repayment easy.
The client can now dip back into this facility whenever they want, only paying interest on what they use and feeling comfortable they have funds available if and when needed.
