What are the benefits of Asset Finance?
Every business needs to acquire assets as it grows. Once you have chosen the assets, a number of important questions need to be asked:
- Do we purchase the assets outright, or lease/hire them?
- If you have cash flow problems, paying cash is not usually the best option. Then the questions are “what is my best option?” and “Who offers the better deal?”.
That’s where BFS comes in. We will help you not only to decide what form of asset finance is appropriate for your needs. Also who offers the best package?.
In simple terms the options are either Hire Purchase or Leasing. In some cases ‘Vendor Finance’ may be appropriate. In deciding which of these is the best alternative for the business, you need to consider:
- Is it important for us to be able to own the asset at the end of the finance period?
- What is the most appropriate payment schedule?
- What are the tax implications to the business?
For more information on these asset finance lending options, please click on the links below:
Invoice & Trade Finance
Do you have access to sufficient working capital? This is essential for any business, and particularly so for a startup or a growing business.
Many businesses will have much of their cash tied up in their sales ledger. Invoice financing (IF) offers you a means of avoiding this. IF accelerates payments from debtors, thereby turning invoices into immediate cash. Usually an invoice finance facility provides you with a prepayment of up to 80% of the sales invoice value. The balance is released once the customer pays.
Invoice Finance can take three forms:
Factoring
- Here finance is provided against your sales ledger as described above, together with the benefit of the Funder also managing the day to day administration of the sales ledger for you.
Invoice Discounting
- Cash is provided to you up front against invoices. Here, however, the business retains control of the sales ledger.
Selective Invoice Discounting
This is another option, a variation on Invoice Discounting, that you might choose. There are a number of Lenders who provide this service, including some Crowd Funding Platforms. Essentially what they do is to offer an invoice discounting facility on one or perhaps a group of Invoices. This way you (the Borrower) do not have to put all of your invoices through their scheme.
Funding can be arranged across a wide variety of sectors. There are, however, only a limited number of funders for these sectors, but we at BFS have access to them for our clients!
This can offer a very useful and flexible solution to those requiring only a short term boost to their cash flow. For more details on this just call us on 0800 093 5240 and we will be happy to explain.
Trade Finance
Some Lenders will advance funds against confirmed orders. This allow you to purchase the supplies needed to fullfill an order. Very useful where your business does not have sufficient standing with the supplier(s) to obtain credit terms or has been refused a bank overdraft.
This can offer a very useful and flexible solution to those requiring only a short-term boost to their cash flow. For more details on how this could work for you, just call us on 0800 093 5240 and we will be happy to explain.