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Posts Tagged ‘Asset Finance’

ING Lease wiithdraws from UK market

Tuesday, October 30th, 2012

ING Lease (UK) limited , the UK’s biggest asset finance and leasing company, yesterday announced that as from the end of November they are withdrawing from the UK market. All deals must be completed from start to finish by the end of November. This will undoubtedly leave a big whole to fill as they advanced approximately £40m every month. There will obviously be consequences for UK businesses as the alternative finance companies tend to be more expensive and their underwriting requirements are more onerous. Thankfully XL Business Finance has access to alternative funding lines and we are well placed to find the next best solution.

Asset Refinance available from Prime funder

Friday, January 6th, 2012

Until now stand alone asset refinance has only been available from specialist  and traditional more expensive finance companies.  However, a prime funder has now entered the market offering to refinance plant machinery and tangible assets providing it is for the right reason. Funds might be required for expansion, deposit on a new machine, an MBO or an MBI.

The balance sheet of the business must be reasonable and the business must have been trading for more than three years. Providing there is a strong rationale for the refinance and the equipment has good value we have a very good chance of obtaining some funding. Businesses which are struggling and need to refinance kit because they  and are struggling to pay creditors may still be able to obtain funding but it will be via a very different type of lender.

Normally it is possible to provide an indication of what is available within 24 hours. All we need to get the ball rolling is a list of plant and machinery to include age make and model. We can then get a value of the kit for refinancing purposes which enables a quick assessment of the viability of the refinance. XL Business Finance is one of the Uks leading funders in asset finance and refinance and we have 15 years experience in doing such deals.

 

 

 

Need equipment finance?

Friday, April 15th, 2011

Obtaining equipment finance can still be a bit tricky in the current environment. The high street banks are still being very difficult although they can do some fantastic deals for their own customers. However not everyone wants to use their own bank as many business owners understand the merritts of not having too many eggs in one basket. XL Business finance for the right customer can arrange equipment finance that will be just as competitive as many high street banks. This will leave valuable funding lines open with your bank for expenditure programmes that are not available for equipment finance.

 

 

Will my bank give me the best asset finance deal?

Monday, March 28th, 2011

Other than a businesses own bank there are still only a few independent asset finance companies offering hire purchase and finance lease facilities. And depending upon which bank you are with you might not get offered asset finance at all. If a bank wants to deal with you then you will get some of the best deals possible. However do you really want to tie up valuable banking lines which may restrict your future ability to obtain funding. If you can get funding via a third party funder it is always advisable to spread it around a bit. You may have to jump through a few more hoops but it will certainly be worth it!

Asset Finance and CCJs

Wednesday, March 23rd, 2011

The fact that a business has CCJs doesn’t necessarily prevent it from obtaining asset finance, however it certainly makes it more difficult. Most high street asset finance companies such as ING Lease will not touch a business with a CCJ. XL Business Finance recognises that not all CCJs are the fault of the directors.

We are therfore regularly providing hire purchase and finance lease facilities for businesses that have CCJ registered against the business. We recognise that they picked up due to disputes with suppliers or over zealous creditors. as long as there is a credible reason then it is certainly possible to help.

Does Your Business have the XL Factor?

Monday, March 21st, 2011

Does your business have the XL Factor.  XL Business Finance has been helping Managing Directors and Finance Directors put the X Factor back into their business. Whether it is factoring , invoice discounting , asset finance or refinance we are fast becoming one of the UKs leading and most respected independent finance companies.

In a time when it is very difficult to obtain funding via more tradition banking facilities we go the extra mile to help you find the right funding solution. Whether you are a blue chip company requiring the best interest market or a or a company requiring funding out of an administration we provide by far and away so many options than a high street bank. Give us a call today to see how we can the XL Factor into your business!

New Start Asset Finance

Wednesday, February 23rd, 2011

New start asset finance and factoring facility agreed for new start direct mail business

Very brave I hear you all shout.  A new start business in the current economic climate. Well with the right type of funding support greatly increases the chance of survival. It is a well known myth that businesses don’t go bust because they don’t make money but because they run out of money. How many times have we seen many businesses purchase equipment for cash and then at a later date try and refinance the kit because they have run out of money. We say time and time again that it is far easier organising the finance on the outset rather than trying to do it retrospectively.

Under the right circumstances it is always possible to organise hire purchase and leasing for a new start business. Allot obviously depends on the type of equipment and the security that it offers. Traditional assets with good residual values always provides better security than high tech equipment and are easier to finance. In addition the people behind the business are just as important and your personal circumstances will be taken into consideration.

Once you are  up and running it is important that your business has adequate cash flow. Overdrafts are hard to come by for new start businesses. A factoring facility providing cash against unpaid invoices will provide a valuable working capital and a life line. In choosing your factoring company beware not all factoring companies are the same and some are better at handling new start businesses than others. Much will depend on the nature of your business , the quality of the debtor book and your geographic location.

Is Leasing cheaper than paying cash?

Thursday, February 17th, 2011

There is certainly an argument for using asset finance to fund equipment. The main reason I would say, is that cash is always better in the bank than tied up in assets. “Cash is King” as they say. I have seen many cash rich companies pay cash for assets and then due to a change in circumstances wish to refinance the kit because they have run out of cash. The problem is that to refinance equipment after it has been purchased is always far more expensive! 

Equipment can be purchased either by Hire Purchase or finance lease.

There is an argument to say that leasing is more tax efficient as the whole of the monthly rentals can be offset against taxable profit, Therefore the full tax allowances are obtained over the same  period of the lease. It can be argued that the return on the cash left in the business is greater than the cost of the finance lease less the tax benefit. At the end of the finance lease the business continues to pay a secondary rental or can obtain title via a third party. Anywhere between one or 3 additional monthly payments will need to be paid 

Hire purchase has slightly different tax treatment whereby capital allowances are claimed on a reducing balance . An option to purchase fee is paid with the final payment typically £50 to obtain clear title

As a rule of thumb most accountants would recommended equipment and hi tech assets that have a limited life span and are regularly replaced should be financed on finance lease and long life assets be funded on HP. Each customer will be different and should really speak to their own accountant to determine the best way forward.

New Finance company enters Asset Finance Market

Tuesday, November 23rd, 2010

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.

Pension Funds and Asset Finance

Monday, November 8th, 2010

As many business owners are aware it is possible to invest in commercial property using a pension fund. The benefits of such a plan have well been documented. However it is also possible to  purchase plant and machinery using asset finance via the pension fund. Whilst on the face of  it , it would appear pointless purchasing a depreciating asset in such a manner there are a number of major advantages  in doing so. Whilst XL Business Finance cannot provide specific advise we were recently involved in such a scenario. Read on!

A major plant hire customer needed some equipment for a new contract. Whilst there was nothing wrong with the credit worthiness of the business we all know that there are few high street funders offering decent rates. Get fully committed with these funders and the second tier can prove very expensive. Organising a loan via the pension fund provided some very very competitive funding indeed.

So what about the tax side of things. Whilst the equipment itself will depreciate over a period , the contract the kit was  being used for would generate a significant amount of income. This income would therefore be paid into the pension fund in a tax effeicient manner. The return on the initial investment was many many times greater than the initial investment and prooved to be some clever tax planning. Whilst this kind of scenario will not work for every business itr is an option that business owners should be aware. XL Business Finance cannot provide specific pension and tax advise however I think this illustrates the concept quite nicely.