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Archive for the ‘Case Studies’ Category

Asset Finance Leasing cont

Tuesday, November 10th, 2009

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.

Asset lenders are less interested in the balance sheet but more in the actual value of the equipment. Asset lenders will obtain a valuation of the equipment or machinery to be financed or refinanced and Will lend a percentage of its perceived forced sale or trade value. Therefore it is quite possible that a business might buy a piece of kit costing £100k and an asset lender will put a forced sale value on it of £60k however might only lend £48k needing the customer to find a substantial deposit.

Therefore if you are struggling to obtain a traditional finance lease or hie purchase facility with a high street laender or balance sheet lender it is possible you might find yourself caught between a arock and a hard stone. Your company isnt strong enough on paper for the high street lenders but the value of the equipment isnt enouugh to make the project work because you dont have enough deposit. Unfortunately there is very little inbetween at the moment as their are fw finance compnaies left in the middle ground.

To make sure you have the best chance of succeeding with a high street finance company you need to make sure that the proposition is presented to the finance company in the best possible light. XL Business Finance has over 10 years experience in dealing with complex proposal on behalf of customers and our expertise in this area will greatly enhance your chances of success. If the high street is a non starter we also have the expertise to deal with the asset based lenders to structure a deal which may enable you to move forward.

Tags: finance lease, hire purchase
Posted in Asset Finance | No Comments »

Asset Finance Leasing

Monday, November 9th, 2009

The last 12 months have certainly been difficult in terms of organising asset finance. Finance companies are taking are very strict approach when it comes to underwriting. Many of the bank owned high street finance companies are only lending to their own customers and some are not lending at all. Bank of Scotland and Barclays appears not to be providing any leasing deals at all and others are doing so on a restricted basis. HSBC will only provide facilities of over a £100k and Lombard are only lending to Nat West and RBS customers. Therefore thee are only a few options when it comes to hire purchase and asset finance leasing. Thankfully XL Business Finance has over 10 years experience in the market and has the means to add value to any capital expenditure product by knowing which companies are in the market and which are not.

Although there are signs that the economy is picking up we are still technically in a recession and I believe that it will be many years before we get back to how the asset finance market was before the credit crunch. It is virtually impossible to obtain funding for intangible investments unless you have a very strong balance sheet or you are prepared to pay a very high interest rate and provide personal guarantees. Therefore computers, telephone systems and any high tech equipment is even more difficult to obtain funding for in this difficult market. There are a few finance companies prepared to advance £10k per customer on this basis but it is no guarantee.

Otaining finance for what is perceived to be machinery and equipment which you may think has good value for security purposes can also prove difficult. Unless you can get finance from a high street funder which look at the strength of your balance sheet you might be caught between a rock and a heard stone. More on this later.

Tags: asset finance leasing
Posted in Asset Finance | No Comments »

Invoice finance

Wednesday, November 4th, 2009

Invoice Finance is still the fastest growng commercial financial product available. The ability to release cash against unpaid invoices can provide the financial freedom which the traditional banking products so often fails to deliver. The good news is that there are still many finance companies offering invoice finance and as such it is relatively easy to obtain funding. Which finance company is best for you depends on the your particular circumstances. XL Business Finance has experience in organising invoice finance for businesses turning over £70k to big PLC companies with turnover in excess of £30m. We have the expertise and knowledge to help guide you through the manydifferent options and match you with the most appropriate finance company.

As with any type of finance high street banks try to be all things to all men and in reality don’t often do the job as well as an independent finance company. An independent invoice finance company is not bank owned and obtains funding from private and independent sources. Therefore an independent invoice finance company tends to be a little bit more flexible and approachable than a high street finance company. However there are certain high street banks that are particularly good in niche areas. For example one high street bank is very good at doing international trade finance whereas another high street bank is very good at doing construction invoice finance. The point is that a good independent factoring broker can save a business time and money by recommending the most appropriate finance company.

Obviously there is other criteria which we take into consideration. The geographic location can be important but not paramount. Te length of time the business has been trading. The profitability of the business. The quality of the debtor book to be funded and whether there is any adverse credit all need to be taken into consideration. And the good part is that our service is totally free of charge. It doesn’t cots you a penny to be put in touch with the most appropriate invoice finance company.

Tags: independent factoring boker, invoice finance
Posted in Invoice Finance | No Comments »

Leasing plant and machinery

Monday, November 2nd, 2009

As an independent finance company we are certainly busier than we have been for the last 12 month. The level of enquiries and business written during September and November has been back to pre recession levels. Wether this remains at this level remains to be seen but there are certainly some encouraging signs. Hopefully we have finally turned the corner however we envisage it will be many months and possibly years before the financial institutions and banks start freeing up their lending criteria.

This time 12 months ago we were seeing many businesses putting plans on hold and unwilling to commit to any capital expenditure projects. And who can blame them not knowing the severity and duration of the forthcoming recession. Now 12 months on and I think the general consensus of opinion is that whilst things are not great they probably are not going to get any worse. Therefore if a business can make their plans and plant and machinery investments work in the current climate there is an attitude of lets crack on with it because when business really picks up we will be well placed to reap the rewards.

Although we are hopefully out of the recession banks and finance companies will remain to be tight for months and even years to come. Combined with the lack of liquidity in the finance markets it will be still remain difficult to arrange hire purchase and leasing facilities for the foreseeable future. There are few leasing companies actively lending and many of the banks are looking after their own customers and only the good ones at that. Fortunately there are still a few funders still lending money and a good independent finance broker will be able to source the most appropriate funding. It is most important that all the correct financial information is presented to the appropriate finance company to ensure the best chance of success. This is where XL Business Finance has many years of experience and expertise and we will endeavor to make sure your finance needs are fullfilled.

Tags: hire purchase, independent finance companies
Posted in Asset Finance | No Comments »

Financing Equipment from a Foreign Supplier

Tuesday, October 20th, 2009

Financing eequipment from a foreign supplier might not be as straightforward as one would think. Strangely however the larger the transaction the easier it is. Different finance companies have different views of what can and cannot be done so it is worth speaking with a good independent finance broker that can guide you though the various options.

There are only a few finance companies that can help with hire purchase or the finance lease of equipment from a foreign supplier. It is always worth trying to get the finance in place well in advance of you actually requiring the facility. As most finance companies will agree a facility for a max of 90 days it is best working out your options no more than three months in advance.

There are two ways of funding equipment in this way. The first is for the customer to purchase the equipment from the foreign supplier. They will have entered into an agency agreement authorising the customer to purchase the quipment on behalf of the finance company. In the terms of the agency agreement it will have been agreed that the finance company will then provide a finance lease agreement or a hire purchase agreement to the customer. Certain finance companies will will only transact these agreements at a certain level because of the amount of paperwork involved. The other disadvantage is that the customer must be expected to pay for the goods up front. Sometimes if the foreign based supplier requires paying in advance then this can be the only way to finance plant and machinery supplied by foreign suppliers.

If there is a good relationship with the foreign supplier you may still have to enter into an agency agreement however it may be possible for the finance company to pay the foreign supplier direct. For this to happen the goods must have landed on the UK so the finance company can inspect the goods. It may even be possible to structure a deal so no VAT is paid to the finance company. This only works with non UK invoices. Give us a call to find out!

Tags: equipment finance, independent finance broker
Posted in Asset Finance | No Comments »

Invoice Finance

Wednesday, October 7th, 2009

Invoice Finance is simply the means of releasing cash against unpaid invoices. Invoice finance takes place in a variety of forms and can include invoice discounting, confidential invoice discounting, factoring, confidential factoring and trade finance. Which ever facility best suits your specific requirements the ability to release additional cash can certainly help a business with their cash flow.

Invoice discounting is simply the means to raise cash against unpaid invoices. It is normally offered on an undisclosed basis. As your customers will be unaware that you discounting your invoices it is more susceptible to abuse and as such it suits businesses which are financially strong, reputable and long established. In the current economic climate it is more difficult to get an invoice discounting facility for marginal customers. Costings for such facilities are comparable to a bank overdraft with a a charge over base for borrowing the money plus a small monthly service fee for operating the facility.

As factoring is done on a disclosed basis and your customers will be asked to make payment to the factoring company from the finance companies point of view the product is less risky and as such just about most businesses can obtain a factoring facility. In addition factoring comes with credit control whereby the finance company will chase your debts. This really does add value to product and as such you don’t always get what you pay for. Independent factoring companies tend to be be more proactive than banks factoring companies and as such there may be slight variations in costings.

Tags: Factorng, invoice finance
Posted in Invoice Finance | No Comments »

Vehicle Finance

Friday, September 25th, 2009

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.

Weare seeing many businesses coming off contract hire deals and needing to replace vehicles passed their best. The problem is that the funders are very difficult when it comes to agreeing contract hire deals. If there have been any trading issues or changes in circumstances contract is not the easiest form of finance to get approved.

XL Business Finance however has sourced a number of commercial vehicles recently at much bigger discounts than if the customer had just walked in off the street. This is because we deal a multi franchise car and commercial vehicles supplier which deals with all the contract hire companies. The savings are potentially massive. We tend to put these vehicles straight onto a hire purchase or finance lease agreement and the monthly payment is often not much higher than they would have been paying on a normal contract hire deal. In addition the vehicle which becomes the property of the business at the end of the agreement can be used for a further payment without any additional cost or can be used in a deposit in your next deal.

Tags: finance lease, hire purchase, vehicle finance
Posted in Asset Finance | No Comments »

Invoice Finance

Monday, September 21st, 2009

Businesses wishing to free up cash against unpaid invoices can use Invoice Finance as a means of assisting with cashflow. There are various forms of invoice finance and which form of finance is best for you depends on a various circumstances. A good factoring broker will be able to assist with choosing the right company.

Confidential invoice discounting is best suited for businesses which are well established and have a proven track record of being able to collect their invoices. Adequate systems must be in place and any finance company can make an offer subject to an audit. One of our complaints as a broker is that we see offers which in reality we know will not come to fruition. We know exactly which finance companies are able to deliver and which ones will fort short on their promises.

A traditional invoice discounting facility will enable a business to submit invoices and they are able to draw cash immediately. It is very much a trust thing going on and as such a business must be well established and trading profitably. Some finance companies behind the scenes will run a mirror ledger unbeknown to their customer to ensure that nothing untoward is going on. Not all finance companies will do this explaining why some finance companies are happy to offer confidential invoice discounting and some finance companies are not.

Tags: factoring broker, invoice finance
Posted in Invoice Finance | No Comments »

asset finance leasing

Wednesday, September 16th, 2009

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.

The problem with this is that it could restrict a businesses ability to organise future non asset based lending. What is the point of utilising valuable credit lines and funding asset purchase via loans instead of using a third party funder to provide a hire purchase or finance lease facility. In our opinion any capital expenditure is best suited to a hire purchase or finance lease facility which will leave the bank credit lines available for a rainy day.

We say it time and time again. Use the bank for clearing facilities, an independent for your factoring and invoice discounting. Remember if you need an overdraft it wont grow with the business like factoring and invoice discounting and any overdraft is potentially repayable on demand. Using a third party leasing company will ensure that you don’t have too many eggs in one basket and you are not exposed too much to any one financial institution.

There are still third party finance companies open for business. Getting deals agreed isn’t as easier as it was 18 months ago however a good independent finance broker will be able to guide you through the pros and cons of the different finance companies.

Tags: asset finance leasing, finance lease
Posted in Asset Finance | No Comments »

Invoice Finance

Monday, September 14th, 2009

Invoice finance is simply the means of releasing cash against unpaid invoices. Typically 80% of the invoice is paid upfront by the invoice finance company. On payment of the invoice by your customer ( typically after 90 days) the remaining 20% is paid to you less any charges due to the invoice finance company.

An invoice finance facility will unlock cash and assist with a businesses cash flow. Unlike an overdraft facility which is fixed at a certain amount invoice finance will grow as a business expands . In addition an overdraft facility is repayable on demand and so there is always the risk it could be withdrawn. In recent months we have certainly seen this happen as bankers continue to be nervous and unsupportive in these difficult times. The security that banks require to agree an invoice discouning facility also tends to be more onerous with property often required to secure a facility. An invoice finance facility relies on the unpaid invoices as security.

Typically a factoring faciltiy is provided on a disclosed basis and offers a full credit control service. Confidential invoice discounting is normally on an undisclosed or confidential basis and is just a means of providing cash flow because credit control is kept in house. There are many variations offered by numerous invoice finance facilities and different finance companies have different niche products and attributes. A good invoice discounting broker will be able to advise as to which funder will be best for your particular needs.

Tags: Factoring, invoice finance
Posted in Invoice Finance | No Comments »

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Archive for the ‘Case Studies’ Category

Asset Finance Leasing cont

Asset Finance Leasing

Invoice finance

Leasing plant and machinery

Financing Equipment from a Foreign Supplier

Invoice Finance

Vehicle Finance

Invoice Finance

asset finance leasing

Invoice Finance

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