At a time when many lenders are closing their doors to new customers, Close Brothers Asset Finance continues to provide vital financial support to SME business owners in the oil and gas sector.
One of the ways we can help is by using the physical assets of your firm to prove their worth in ways you may not have thought possible.
For many years, during good times and bad, business owners have increasingly turned to asset finance to help them maintain cash flow.
But what is asset finance? In short, it’s an alternative form of funding used by businesses to obtain the equipment they need to grow or access much-needed cash.
Asset finance makes the otherwise unaffordable affordable because it gives businesses access to the equipment they need without incurring the cash flow disadvantage of an outright purchase.
Agreements can also be customised to the business’s needs, with flexibility on both the term and repayment schedule.
There are various products that come under the broad umbrella of asset finance with one of the key ones being refinancing, or capital release, as it’s also known. It’s a proven way to make your assets work for you and release cash back into the business.
It’s pretty straightforward and works by the finance company purchasing the asset and financing it back to you, with repayments calculated in line with the income the asset is expected to generate. At the end of the refinance term, you own the asset.
This offers several great benefits to a business that just needs a cash injection, whether it’s for investment in additional business critical assets or to use in other areas of the business, including unexpected bills and invoices, salaries, VAT payments, diversification – the uses are almost endless.
We can also look to take over a finance agreement with another provider and extend the term, ultimately reducing monthly payments and easing the pressure on cash flow.
Other common examples of asset finance products are:
• Hire Purchase (HP) allows the customer to buy the equipment on credit. The finance company purchases the asset on behalf of the customer and owns the asset until the final instalment is paid, at which point the customer is given the option to buy it.
• Finance lease: The full value of the equipment is repaid to the finance company, plus interest, over the lease period. At the end of the term, the company can choose to:
o continue to use the asset by entering a secondary rental period
o sell the asset and keep a portion of the income from the sale
o return it
For more information, please visit: https://www.closeassetfinance.co.uk/asset-finance