There is definitely evidence that things are picking up in the finance and leasing market. Well they are certainly in terms of businesses buying equipment and requiring fiance. This time last year the industry went very quiet and has been really for the last 12 months. Businesses put capital expenditure plans on hold and battened down the hatches. Twelve months on and we are starting to get more asset finance enquiries. Some of this might be out of necessity as vehicles and machinery becomes uneconomical to keep repairing. Or, it might be because businesses have the attitude that if we can make the investment work in the current climate we may as well crack on with it now because when things really pick up we will be well placed to take advantage of any upturn. Great however until you go to your bank and cannot get any funding. In order to get the best possible chance of an approval for your funding requirements information must be presented to the finance company in the best possible manner.
More and more businesses are looking to refinance existing equipment, plant and machinery to assist we cash flow. XL Business Finance has been helping customers for 10 years and is one of the UK leading independent finance companies in this area. Not only can refinancing equipment provide cash for any purpose and provide financial freedom, it is quite possible to refinance plant and machinery already on finance and provide a massive cash flow benefit by having a lower monthly payment.
High street finance companies are what we would balance sheet lenders. They are more interested in the strength of the business in terms of how long it has been trading, how profitable it is , the size of the net worth and the affordability of the new project or capital investment. If your business ticks all the boxes than they will offer a hire purchase or finance lease facility. High street finance companies take less notice of the actual piece of equipment or machinery you are purchasing however tend to categorise different types of equipment offering differnt levels of security.
There has been a recent increase of customers wishing to replace commercial vehicles. There are many different ways of providing vehicle finance and which option is best depends on the circumstances of each business. In additionthe dramatic change in fortunes of many businesses and indeed finance companies has dramatically changed how vehicles can be financed.
Asset finance leasing is becoming increasingly more difficult to organise. With the exit of Lombard and Hitachi from the broker market there are only a few funders remaining in the market place. Many high street banks have their own asset finance division but they tend to do only the bigger deals over £50,000 for their own customers. If the deal is for under £50,000 they will potentially push the customer down the loan route.
Apparently the LLoyds banking group has made a pre tax loss of £4billion in the first six months trading of this year. This is the result of Lloyds taking over HBOS where an unprecedented amount of risk taking led to its failure and ultimate bail out by the tax payer.
OK , so we have discussed the options for making payment to the supplier but what is the best way to pay for the machinery and what are the best finance options?
Financing imported machinery can be quite a complex issue. Often the supplier will requiring paying up front however the finance company is loathed to release payment before the equipment is delivered to the customers premises.
We often get asked which is the best way to finance capital equipment. In short the answer can be subjective and we will always refer you to your own accountant. However we can provide you with the differences which will probably point you in the right direction.
In my opinion leasing comapanies are continuuing to tighten their underwriting criteria. Every week we receive an email from a finance company saying they have pulled out of financing this sort of equipment or don’t want to finance businesses in that industry sector. Providing you have been trading for more than 3 years, you have a very strong balance sheet, you are very profitable and your accounting information is bang up to date you should have no problem obtaing a hire purchase facility or a finance lease facility, however it is no guarantee. Leasing companies are paying particular attention to sercieability so it is now necessary to provide 3 months recent bank statements as part of the underwriting process. If you are one of the lucky ones you will get a nice interest rate and nice terms. This is good old balance sheet lending. Happy days!
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.
