Asset refinance is a powerful way of raising cash for a business in a short timescale, often within days. This makes asset refinance especially useful when a company is experiencing difficulty accessing other forms of finance which is proving to be the case during the last two ‘credit crunch’ years.
Some examples where asset refinancing has helped businesses are provided below:
A print production company was asset rich but was experiencing cash flow problems in the volatile business environment at the time. The broker helped the company use asset refinance to release hundreds of thousands of pounds of cash which made a huge difference to the working capital available to the business.
A transport business had won a new contract which meant that it needed additional vehicles. Asset refinance was used in the form of a sale and lease back agreement to refinance the existing fleet of coaches and release the cash required for the deposits on the additional vehicles.
An engineering business owned most of its existing assets but its existing bankers were not prepared to extend the existing funding to the business via additional loans or overdraft facilities. Asset refinance was used to release cash for the purchase of additional production machinery. The decision to refinance plant and machinery proved to be a flexible solution for the business which maximised the value already present in the existing assets.
Our brokers are regularly asked to help businesses when they need to refinance existing assets. Contact us for a quote when you need equipment funding.
Plant finance covers a broad range of potential items of equipment that can be financed including excavators, skips, compressors, diggers, etc, etc. The full range of construction equipment can be considered for finance including waste and recycling equipment.
In fact the list of plant that can be financed is endless as long as it meets the normal plant finance criteria, namely that the plant & machinery is identifiable, moveable and durable. The basic concept is that the cost of the plant finance is spread out over a number of years within the expected useful life of the asset which aids the overall finances of the business.
An example where plant finance was put in place was a Plant Hire company that wanted to buy a used Komatsu excavator to add to its fleet of construction equipment that it hired out to various sites around the UK. The excavator was being bought second hand from a dealer with a purchase price approaching £50,000. A machinery lease agreement was put in place with payments taking place over a four year period.
Request a quote from our brokers for your plant finance requirements.
One challenge for many bus and coach companies is how to find the capital required to replace individual coaches or buses within their fleets as they age. Clearly most coaches have long term useful lives which make them ideal candidates for bus and coach financing. By using bus and coach leasing the client can upgrade their fleet of coaches and improve the service offered to their customers at the same time as aligning the ongoing lease payments with the revenue generated by the new coaches. In many cases it would not be feasible for a coach company to source the entire value of a coach and hence they turn to our brokers to put in place a suitable financing arrangement.
This is typically a competitive area of finance and our clients generally get multiple finance quotations and informal offers from a number of lenders including via the dealers who may provide the coaches. Our brokers will review the profile of our client’s business and determine the most appropriate solution for the client, whether that be a longer term agreement or else an agreement structured with lower levels of security over the client’s business or even personal assets. Every case is different and needs experience to determine the best solution.
We frequently arrange machine finance for businesses involved in the engineering, manufacturing and production industries. It is fairly typical for machinery leasing to be used as the mechanism for financing the equipment that our clients need.
Machine leasing is efficient as it allows the capital that would otherwise be tied up in buying a new machine to be freed up for other uses within the business. In essence what the business does is to use the revenue generated by operating the machine to help fund the payments for the machine.
Many of our customers find themselves in the position where they know that they need to purchase a new item of machinery but the capital costs seem prohibitive, especially when cashflows are tight. If they take a different perspective and look at the monthly profit generated by the machine compared with the monthly lease payments that would be due under the machinery lease then it often becomes a straightforward decision. The net result is that the business achieves better production output and efficiency with more predictable budgeting of costs.
In general the lease payment can 100% be offset against profits so that machine leasing is a tax efficient method of accounting.
We had a client which was an engineering business in the early stages of development. They required a computer controlled lathe as a key item of equipment and were struggling to raise finance for this. Our brokers reviewed the client’s requirements and sourced a suitable machine lease for them.
Another client decided to purchase a machine for their production line from Europe. Their own bank was originally going to provide finance for the purchase but withdrew the finance offer at the last minute, causing great stress and frustration for our client and potentially endangering the whole investment. Our brokers then pulled together a proposal on behalf of the client and sourced the required machinery finance within seven days, enabling the purchase to go ahead.