When it comes to choosing the right finance deal for your business, asset finance can be an attractive option, particularly for those that have a great deal of capital tied up in their business’ assets, or those looking to purchase new assets to move the business forward and ensure they remain competitive.
What is asset finance?
Asset finance releases cash tied up in a number of things including equipment, property or other assets that your business owns in full. This option can also support you in financing new machinery, equipment vehicles and more for your business. You ultimately choose to repay this over a particular time scale agreed between your business and your finance provider.
Pros of asset finance
Improved cash flow
A boost in your cash flow will do great things for your business, due to the fact more working capital will support you greatly as you expand or invest in new technologies for improved efficiencies.
There is significantly less risk associated with asset finance as, although you would lose the business asset should you be unable to make payments, you do not risk losing your home as you may with a traditional bank loan.
Time for repayments
Many finance providers will allow you to make repayments over a period of time, rather than in one lump sum, once again allowing you to maintain your cash flow more effectively.
Cons of asset finance
Loss of asset if you can’t make payments
Of course, sourcing finance against one of your business’ valuable assets means that should you be unable to continue with payments, your asset will be taken.
You’ll pay more than the value of the asset
Interest rates on your finance will mean that you will ultimately end up paying more than the value of your asset in the long run, therefore we recommend you weigh up the cost of this against any predicted results you may get from receiving finance of this kind.
There is no one size fits all approach when it comes to finance, one option will be ideally suited to one business but not another, and therefore it is essential that you speak to the finance experts to ensure you choose the ideal finance solution for your business.
If you are looking for the right finance for your business, contact the team at Zodeq today on 01244 617 087.