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Machinery Refinancing

Monday, January 31st, 2011

During January our biggest type of of enquiry was for businesses looking for machinery refinance. I suppose that you can look at this from two angles. A business may need to refinance because they are struggling, running out of cash and need to find some funds from somewhere to keep the business afloat. Or they need to refinance machinery because they are doing well, need some additional working capital because the banks are unwilling or unable to help

Most business owners will say it is the latter however in a small number of cases it may genuinely be because a business is struggling. Any asset based finance company will always be willing to lend against the value of an asset providing they are doing so for a positive reason. On the other hand if a business is struggling they may insist that you take advice from a specialist accountant or insolvency practitioner.

It maybe that it it is better to fund a business following a pre packed administration particularly if there is a lot of creditor pressure and crown arrears. Many business owners think that it is not possible to obtain funding following a pre packed administration. In reality, asset based lenders would probably prefer to fund such a arrangement because the new business going forward will be leaner and meaner. It is true that a bank may not wish to assist with the funding however in reality this should not cause any major problem going forward. An independent invoice finance company will be happy to provide a factoring facility and as such there should be no need of a bank except for clearing cheques.

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

Equipment finance in 2011

Thursday, January 27th, 2011

The hire purchase and leasing market in 20011 is predicted to remain fairly tight and restrictive. There are still a few high street banks offering decent rates and there are still a few independents offering prime rates also. The fact remains that are still fewer finance companies than there were before the credit crunch.

Although there are a few finance companies entering the market. Aldermore at the beginning of 2010 and much later in the year Conniston came across the water from Isle of Man. with any new finance comapnies entering the market this is great news however there is always a bedding in period as they find their place within the market.

Asset based lending remains strong although there a fewer options than there used to be, The most obvious company being Davenham which ceased trading at the back end of 2010.

As per usual if you have a very strong balance sheet it can be relatively easy to obtain funding for asset and equipment finance. It is also relatively easy to obtain funding if you have plenty of value within your equipment. The problem arises is if you have a weak balance sheet and you need to purchase or refinance assets with very little residual value. Caught between a rock and a hard stone comes to mind.

XL Business finance has helped many businesses with their capital expenditure plans. We provide an honest and straight forward approach and always have the businesses best ineterst at mind. Give us a call today to find out how we can help you.

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

Refinancing Engineering Company

Wednesday, January 26th, 2011

XL Business Finance has just recently completed the refinancing of a UK based Engineering Company. Managing Director Mark Redman can be seen checking ( or trying ) serial numbers on the customer’s equipment. See below for further details

XL Business Finance was approached at the beginning of the new year by the companies accountant to help a UK based Engineering company purchase new equipment for an existing project. At the same time the business wanted to future proof their cash flow and refinance their existing equipment to reduce their monthly outgoings. Although the new equipment was only £30k a refinance package including the funding of the new kit reduced their monthly repayments from £3500 per month to £2800 providing a monthly saving of £700.

XL Business Finance is one of the UK’s leading independent finance companies with over 10 years experience in the asset and asset refinance market. As with any financial market products and availability of funds vary from month to month with the various funders. The company accountant for this particular engineering company realised the added value a specialist finance company would add to their their client. XL Business Finance was able to source the right level of funding at the most competitive rates and at the same time ensure the finance company completed all the paperwork in a timely and professional manner.

In light of the newly released quarterly trading performance we are in no doubt in line for another rocky 12 months . Refinance of existing plant and machinery may just give many businesses a life line to provide enough working capital to survive until the next upturn

Tags: business finance, refinance of existing plant and machinery
Posted in Asset Finance, refinancing | No Comments »

Is Invoice Discounting Better than a Bank Overdraft?

Tuesday, January 25th, 2011

We think so but then again why wouldn’t we ! As an independent business finance specialist we are firm believers that borrowings should be spread across as many financial institutions as possible. We also believe that any form of invoice discounting is better than a bank overdraft.

The problem with a bank overdraft means that you are at the beck and call of the bank. An overdraft is repayable on demand and at the first sign of trouble it can be withdrawn at a moments notice. No one ever thinks this will happen but believe you me, we have seen it happen and the consequences are not pretty. Another problem with bank overdrafts is that the amount you can borrow is determined by the strength of your balance sheet or the level of security available. Bank overdrafts of any significant amount are normally secured against bricks and mortar.

Invoice discounting couldn’t be different. A facility is secured against your unpaid invoices and within reason as your business expands so does the size of the facility available. Providing you are looking for standard trading terms borrowings of 80% of debtor book are the norm without the need to provide additional security.

Directors warranties are the normal comfort obtained from the invoice discounting company which provides an indemnity against any fraudulent activity. Fair enough one thinks

XL Business Finance has been helping the SME market for over 10 years sourcing the right kind of funding for a business’s particular needs. Give us a call today to see how we can help you

Tags: independent business finance specialist, invoice discounting
Posted in invoice discounting, Invoice Finance, Uncategorized | No Comments »

Attention all Car owners

Friday, January 14th, 2011

Are you looking to raise cash quickly? It is now possible to organise a short term business loan offering your car as security.

If you have a luxury car which is free of finance , you can release the money or equity tied up in your car on a short term basis. This is different from a traditional refinance agreement that provides funding on a hire purchase agreement over a number of years. The finance company will take your car as security which will be stored in a secure facility.

Whilst this kind of offering will not be an option to everyone there are plenty of business owners out there that may have a second luxury toy or car. As you can imagine APRs wont be the cheapest however they never are when it comes to bespoke and creative funding. It does however provide a quick fix alternative to the bank funding which in the current climate isn’t available to everyone.

How it works. A trade value of the car is obtained from the finance company. A percentage of this trade value is is provided on a short term loan. There are no monthly repayments. Interest accrues on a monthly basis and the finance is repaid at the end of the loan agreement typically 3-6 months. This kind of lending is ideal for customers that maybe have a guaranteed lump of cashing coming to them but need something to keep them ticking over

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

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.

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

It may be possible to get 85% LTV on a commercial mortage!

Thursday, November 18th, 2010

As we know all banks say that they are open for business. Saying and doing are two completely different things. Following an interesting meting this AM with a well known high street bank they reckon they are open for business and could possibly do up to 85% LTV on a commercial mortgage – for the right customer. If there is anyone out there that has been fortunate enough to obtain such funding we would love to know.

In reality obtaining a commercial mortgage will be very very difficult indeed. Long gone are the days that anyone could get up to 80-85% LTV based purely on the asset value rather than their ability to repay. Nowadays the LTV is less important and the most important aspect of any deal is the quality of the tenant and the ability to repay. Therefore if we have a blue chip business making loads of cash within undoubted serviceability needs an 85% LTV commercial mortgage then they may get it. A business that is struggling obviously will not.

The main point here is that all banks and financial institutions say that they are open for business. In reality this is a complete load of whats it. However finance companies do blow hot and cold invariably dipping their toe in and out of the market. To save a load of wasted time a good commercial finance broker will be able to find the right finance comapny pretty quickly

Tags: commercial mortgage
Posted in Commercial Mortgages | No Comments »

Who Is doing Enterprise Finance Guarantee Funding ( EFG ) ?

Wednesday, November 17th, 2010

The banks are supposed to be helping small businesses obtain difficult funding in these difficult times and one way is via the EFG or Enterprise Finance Guarantee. Whilst the EFG does not guarantee success of funding via the banks there are one or two viable alternatives via the invoice finance companies.

The problem with the bank based scheme is that a proposal for funding should meet all the banks normal lending criteria. If you have a proposition that they want to do but the only thing that is stopping them doing it is a lack of security then this is where the EFG scheme gives them the security to do the deal. If for some reason they don’t want to do the deal because your business hasn’t been trading long enough or the financials are not strong enough then it wont get passed first base. EFG funding does not make a bad deal good.

An alternative to bank based EFG loans could be funding via invoice finance companies. One funder provides EFG funding on the back of a factoring or invoice discounting company match funding any directors loans but up to a maximum of fifty percent of the debtor book. Another invoice finance company provides EFG funding to give a business 100% of its debtor book.

Invoice finance companies tend to be a little more flexible than the banks therefore if you have drawn a few blanks then it is worth giving them a call. We will gladly point you in the right direction.

Tags: EFG, invoice finance
Posted in efg funding, General, Invoice Finance | No Comments »

How do I obtain Export Finance?

Tuesday, November 16th, 2010

Export finance is very simply funding your foreign invoices via way of an invoice discounting or factoring facility. This is a very specialist market in the invoice finance sector and as such only a few finance providers can offer a proper facility.

A number of these specialist invoice finance companies have a network of offices and associations spread around the world offering multi currency facilities and credit control. Obviously it is easier to obtain funding in developed countries however it may be possible to obtain funding in less developed parts of the world so long as your customer has a credit rating. As with any factoring or invoice discounting product different companies are better in handling different sectors than others. Just because you go to your bank and they inform you that it is not possible to factor foreign invoices it doesn’t mean it cannot be done via a specialist lesser known finance company.

A good independent finance broker will be able to introduce you to the most appropriate funders. Again it is important to be talking o two or possibly three finance companies so it doesn’t become a one horse race. However if you invite every tom dick and Harry of a finance company non of them will take you seriously an in our experience you end up getting a worse deal.

XL Business Finance has been helping business for over 10 years find the most appropriate funding partner. Give us a call today to see how we can help your business. Go on you know you want to!

Tags: import financce, invoice finance
Posted in international trade finance, Invoice Finance | No Comments »

Import Finance explained

Monday, November 15th, 2010

Basically there are two types of import finance. Firstly there is the type whereby you are importing pre sold golds and import finance is provided on the basis that you have pre sold the goods. Secondly there is the type where you are importing goods however they have not been pre sold and as such funding is providing based on your track record of selling these goods.

Funding for pre sold goods is certainly more straight forward and is available for most types of businesses and products. Perishable goods become more difficult to fund for obvious reasons. Businesses that have been told by their bank that they are not eligible for funding have a very good chance of obtaining funding via the more flexible and independent trade finance companies. The finance company not only can provide funding for the import element but it can also provide funding via invoice finance as soon as your goods are delivered to your customer and an invoice is raised. Therefore it is possible to obtain funding from start to finish. The finance company does this by taking title of the goods at the start of the transaction and not releasing title until the goods have been paid in full via your end user.

Banks tend to provide trade finance based on the track record of the business. Their exit route is not necessarily the guaranteed sale of the goods to your end user but is based on the ability of the importer to sale the goods and repay the facility. Therefore from a high street banks point of view a business must be well established , profitable and ideally bank with themselves to be considered for funding.

XL Business Finance has over 10 years of experience and expertise in helping business choose the right funding solution

Tags: import finance, invoice finance
Posted in Trade Finance | No Comments »

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