Asset Refinance – How Can it Work for your Business?

A recent article in the Daily Telegraph highlighted that two thirds of small businesses are unaware of or have limited knowledge about asset finance. The consequences of this are stark – companies turning away business because they don’t have the necessary machinery, vehicles or equipment to fulfill orders.

Whereas Asset Finance can be used to fund most new business assets, Asset Refinance can be used to free up capital in assets a company already owns, providing companies with a cash lump sum against an asset which is then repaid over several years. For businesses with assets such as Plant & Machinery, vehicles they perhaps financed initially or that they purchased outright, refinancing can provide a welcome cash injection. Often, refinance can be used alongside existing facilities such as Invoice Discounting/Factoring to provide another source of funding for a business; the facilities are complementary as refinance focuses on the specific assets to be refinanced rather than the sales ledger. Companies benefit from knowing exactly what payments are to be made, assisting with budgets and forecasts, as well as retaining the use of the asset throughout. The asset can continue generating profits even before the first payment is due!
As with all finance facilities, the more information that can be provided with an initial inquiry the better (see the blog post on an Underwriter’s View). However, with asset finance/refinance, rather than debtor information an underwriter needs information on the asset or equipment such as make, model, year of manufacture and in the case of used vehicles or equipment, mileage or hours. For refinance being able to provide copies of original purchase invoices and proof of payment will speed the process up and a lender may request that independent professional valuations be undertaken, depending on the assets to be refinanced.
Once an offer is made Single Invoice Discounting can be a great way to raise any deposit required for an asset refinance facility, particularly if the refinance is needed to provide working capital. As Asset Refinance specialists, Genesis Asset Finance would recommend Single Invoice Discounting for raising any deposit that might be required for an asset refinance facility.

If you want to discuss asset re-finance with Genesis Asset Finance, the you can visit their web site or call them on 0161 371 1160