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Need to arrange equipment finance?

There are two very  different types of finance companies when it comes to arrange equipment or asset finance. There are balance sheet lenders and there are asset lenders. They approach things in completely different ways.

 Balance sheet lenders are typically your banks and high street finance companies. They are more interested in how long a business has been trading, how strong the balance sheet is, how profitable a business is and without a doubt you must be able to evidence serviceability. They are looking for businesses trading f0r more than 3 years without any blemishes on their trading history. If there are any county court judgements finance will tend to be declined. If your investment is £100k for example they will expect to see a net worth of at least that amount.  If your business is strong enough for balance sheet lending you can expect to obtain very favourable interest rates and excellent terms for hire purchase and finance lease transactions.

The problem is that the high street lenders are being very picky about who they will lend money to. A business which could have obtained funding from a bank 18 months ago may find that they are given the cold shoulder at the moment. It is a combination of banks tightening up their underwriting criteria combined with a lack of cash in the market which has caused basic economics of supply and demand to kick in.

The alternative are the asset lenders. These finance companies are specialist finance companies that will value equipment and lend a percentage of their perceived forced sale value. Therefore a new machine costing £100k may only have a day one forced sale value of £60k which might mean they will only advance £50k against that piece of equipment. The remaining deposit would therefore need to be found by using additional equipment to provide a more secure transaction. XL Business Finance has been providing funding solutions for over 10 years.

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XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

XL Business Finance, Eaton Place Business Centre, 114 Washway Road, Sale, Cheshire M33 7RF UK.

 

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