Digital Equipment can be described as being a soft asset. In the view of any finance company wrongly or rightly digital equipment is perceived as having very little value from a security point of view. Therefore most finance companies will take a very different approach when underwriting a deal. Unless a business has a very strong balance sheet , has been long established and is very profitable most high street banks and finance companies will not finance digital equipment. In other words they view it as unsecured lending and in the current economic climate it is difficult to get finance agreed on this basis.
However there are a couple of specialist funders that as a rule of thumb will advance to the business £10,000 for every director that is a home owner. In most cases personal guarantees will be required from eack of the directors. The finance companies are calling all the shots at the moment and due to the lack of funds available in the market for every potential customer saying they will not provide personal guarantees there are probably a dozen or so saying they will give personal guarantees.
Alternatively it may be possible to refinance existing equipment to provide additional security to the finance company. XL business Finance is a speacilist in this area and asset secure deals can be structured to purchase high tech equipment. If there is still a shortfall in finance it is possible to do a deal by taking a charge over property. Specialist funders can do these deals very quickly. They don’t need business plans and projections as the banks will do. A deal can be put together as quick as it takes to obtain an authority from the first mortgagor.
