One of the biggest problems a business faces today is the lack of finance companies in the asset finance market. Some of the big high street banks will provide hire purchase and leasing facilities for some of their better customers wishing to purchase capital equipment. If your bank is unwilling to support or you don’t want to have all your eggs in one basket as far as third party funders there is only one. ING Lease has probably been the only only decent third party funder operating in the asset finance market. Their rates are good however they can only be accessed via the broker network.
After ING organising funding has been slightly more difficult . Whilst ING are a great funder if for some reason they dont want to play ball the next best alternatives in comparison are far more expensive and onerous in terms of security required. Asset based lenders will only lend a percentage of the forced sale vale and their funding costs all start around 12% nominal. Alternative leasing companies willing to take a view will only lend £10k per director and will always undoubtedly require personal guarantees.
The good news is that there are one or two finance companies entering into the market. Both are pitching themselves not as competition to Ing and your own high street bank but are positioning themselves between these funders and the expensive asset based lenders.
This has been an area in the hire purchase and leasing market where there has been somewhat of a funding gap. Any business that is not quite strong enough for prime rates may have found themselves stuck in the middle of a rock and a hard stone as the kit did not meet the requirements for the pure asset based lenders. Only time will tell as to whether these new funders start to mop up these deals.
Tags: Asset Finance, leasing
