Keeping a business afloat is never an easy task, but in times of financial hardship, it becomes even more of a challenge.
Struggling to pay for important business costs has left many businesses unable to know where to turn next. Fortunately, there is an option for boosting your business even in times of financial stress – asset finance.
If you are wondering how asset finance works, keep reading.
Different financing options fall under asset finance. The hire purchase and leasing types involve spreading the cost of a brand-new asset over some time. A finance company pays for the assets upfront, and then you pay them back at the agreed time. Once paid off, it is decided whether the business owner keeps the asset or it falls to the finance company.
The other type – refinancing – involves getting a loan based on the assets that you already own. Instead of paying for a new asset, you can use the loan money for any business area.
If you require new assets but can’t afford them upfront, asset financing can help you.
How much you can borrow through asset financing entirely depends on your business’s needs and the finance company you choose. Some businesses – particularly smaller ones – may borrow just a couple of thousand pounds. Others, however, might be able to borrow up to hundreds of thousands. Some companies even offer loans in the millions, but that is for large corporations.
Before you can secure an asset finance loan, you need to prove to the finance company that you are capable of paying it back. Some things you can expect to show when applying:
You should also consider the return on investment. If you can show the finance company how the asset will boost your company’s profits, they are more likely to accept your application.
Now you know how asset finance works and how you need to prepare, you might consider whether it is right for your business. While asset finance is not the right option for every company out there, it can be a lifesaver for those struggling. Here are some of the best advantages of choosing asset finance:
Asset finance is an excellent choice for businesses wanting to get back on their feet.
To find out more, get in touch with our team of experts and we can help guide you through the process.