Do you feel ready for your small business idea to become a reality? You’ve identified a gap in the market, put in the research to verify the validity of your proposed company, and the parts are in place to get the machine up and running. There’s just one last hurdle to overcome: you haven’t secured the funding required to start your business.
The good news is there are various financing options available. The bad news is that due to the number of options to choose from, each with their own positives and negatives, the process of picking one can seem like something of a minefield. This is why it’s important to do your due diligence before signing on the dotted line for a funding solution.
One of the fastest-growing options used by savvy business owners is asset finance. However, why is this a crucial form of finance for start-ups?
You may have an idea about what asset finance entails. It is a way for a business to obtain an expensive asset – from a piece of machinery to a computer system – that is currently beyond their financial means. Rather than waiting to save up the money required to make the purchase, asset finance opens the door for a company to acquire what they need immediately.
Yet how does it work, exactly? Asset finance is a form of loan that is established between you and a specialist asset finance company. After approval for a hire purchase, the loan company pays for the equipment you need, you receive said equipment, and you pay for it based on the agreed-upon loan terms.
This general description is easy enough to follow, but the situation becomes a little more muddled when exploring the different types of business asset finance available.
The biggest benefit of utilising asset finance is that, rather than spending a large sum of money outright; you can spread this out across relatively low weekly or monthly payments. This is particularly advantageous for start-ups with tight budgets.
Another positive of asset finance relates to collateral. In most cases, the asset that was financed is the collateral. As a result, if you are unable to repay your loan for whatever reason, it is only the asset itself you’ll lose. That means the likes of your car, home, or other personal possessions are not in danger.
Furthermore, during the terms of your loan, the responsibility of the asset remains entirely with the asset finance company. Because of this, you don’t have to worry about splashing out on expensive repair costs or, worse, a full replacement. The asset finance lender is responsible for any breakdowns and failures.
Ultimately, asset finance supplies an extra layer of security and freedom compared to other start-up loan options.
You know what asset finance is, how it works, and the advantages of going with this loan type. Now there’s just one step left: understanding how to acquire asset finance as a start-up.
As a new business, it is understandable for you to feel there are certain roadblocks in place that make it tricky to gain the asset finance you require. However, it’s a lot easier to do than you may think – particularly if you have the right support.
That is where TSF Finance can provide assistance. With our knowledge and expertise, we can help you with all of your asset finance needs. Contact us today for more information.
