Asset Finance and Leasing

We understand that keeping cash flow available within a business can be critical to the daily operations, but from time to time you may need to obtain up to date machinery and equipment to improve processes and profitability. Rather than tying up cash flow, it may be worth considering asset finance or leasing the equipment.

You might just be looking to inject some extra funds into the business and a great way of doing this is by re-financing your company’s existing assets gaining the capital needed.

Whatever the reason, we work closely with our clients to ensure quick access to affordable finance, helping you to gain the equipment or cash needed to assist the growth of your business.

Each lender will have their own criteria for acceptance and they can vary significantly from each other. Some lenders will only support low risk clients whereas others may be more flexible, but this is more often than not reflected within the rates charged for the finance. Below you will see some of the considerations and information reviewed when assessing a client’s suitability for finance approval:

•  Last filed financial accounts
• Current balance sheet and profit and loss
• Bank Statement Review (generally the last three months)
• Payment history (e.g. late payments, County Court Judgements)
•  Turnover and profitability
• Trading history
• Confirmation of both VAT & PAYE current position

As stated above there are a number of lenders with different approval criteria; but as a general guide, the following are pretty much standard factors that our lenders will look for in a business when making their suitability assessment:

• Business to be trading for a minimum of two years
• The business is profitable
• No legal notices or insolvency proceedings
• Defaults must be over two years old and not more than £1,000 in value or a reasonable explanation must be provided
• Be a registered business within the UK
• UK homeowner (Minimum of one director with asset equity to cover loan value in order to support the personal guarantee)
•  The loan amount is less than 25% of the business annual turnover (Revenue and Turnover will be assessed to confirm affordability to this   level)

All of the factors above will be taken in to consideration, allowing the lender to make a full assessment with regards to the suitability of your business for lending purposes together with the ability to repay the finance. Although you may feel that the assessment criteria are extensive, our lenders tend to be much more flexible than high street banks.

Interest rates

If your business is approved for lending purposes, the finance may incur an interest rate in line with your business risk profile. The business profile is categorised in three different tiers, high, medium and low risk. The risk calculation will be based on the assessment made by the financier during their application and approval process. You should expect that the higher the risk, the higher the cost of the finance.

The assessment will consider all aspects, such as the finance term, business profitability, and length of trading in the current sector. One of the best indicators of what interest rate you may pay for the finance is to review your business credit rating. If your credit history is poor then you’re likely to pay higher rates of interest. The stronger the credit rating and a strong financial standing should see your business profile improve which means you should see a reduction in the interest rates payable.