Making significant investments in new tangible assets such as computing equipment, industry machinery, manufacturing plants or vehicles could allow your business to grow considerably.
Small and medium businesses and enterprises (SME’s) will often rely on asset investment to enable them, over time, to develop their clientele and profit margins.
High levels of expense are usually required to obtain such equipment which is where asset finance can assist.
As the third most common source of financing for businesses after banking overdrafts and loans, and with newly released figures from the Finance and Leasing Association suggesting that new businesses growth was 13% higher in the first quarter of 2014 than the first quarter in 2013, thanks to asset financing - this finance option is becoming more vital to the growth of public sector businesses.
As a financing option asset finance provides SME’s with a more flexible loan to obtain required assets protecting both their cash flow and providing tax benefits.
As a valuable alternative to the conventional bank loan asset finance allows the loan to be secured on the asset being financed which cannot be recalled during the length of the contract.
SME’s are also given the option to replace or update the equipment at the end of the lease.
Around one in three SME’s that use external borrowing use asset finance which is available in a range of options.
Here at Davies Corporate Finance we have access to a variety of funders which enable us to provide a range of asset finance services against capital items that a business may purchase.
Whether you’re a sole trader, limited company or a new start up business we provide our asset financing services across the UK which include:
- Car finance
- Commercial vehicle finance
- Construction plant finance
- Machinery and Equipment Finance
- Asset refinance/equity release finance
- Non-core asset finance
- Professions finance
- Hire purchase/Lease purchase
- Finance lease
- Operating lease
- Sale and Lease back
- Sale and HP back
- Business contract hire – Cars/LCV’s
- Personal contract purchase
- Short-to-medium vehicle hire
Our option of Hire purchase or lease purchase agreements helps SME’s spread the cost of equipment, vehicles and further assets through fixed monthly payments with fixed monthly payments.
This is often a popular option for smaller businesses as the asset requires only a small deposit of between 10% and 20% and no security or collateral is needed. An added benefit is that once the contract is paid off the asset then becomes owned by them.
A key advantage for hire purchase agreements is that financial charges for these assets are tax deductable which effectively means that the tax man will be financing some of the asset for you – which is nice of him!
Finance leases are also popular preferences for small businesses as it avoids any the 20% of VAT costs having to be paid on top of the deposit for the asset.
The low deposit which you decide upon with fixed monthly payments is often suitable for most businesses particularly as once again like hire purchase agreements no personal or business assets are used as collateral.
While the business will not legally own the asset throughout the duration of the agreement the tax advantages often outweigh the need for immediate ownership.
Our aim is to assist you in making significant financial decisions for your small business or medium enterprise.
