Despite the removal of all restrictions related to the COVID-19 pandemic bringing trading levels back closer to what they used to be before the pandemic, the continuing crisis surrounding the cost of living has been threatening many businesses still trying to recover from a harrowing couple of years. The previous Prime Minister announced a cap for consumer energy bills at £2,500 for the next two years, which was then reduced to until April 2023, and an “equivalent support for business” to help navigate what already promises to be a difficult autumn and winter, available to all businesses for 6 months, with a review at the three months mark to understand what further support might be needed after that. However, as was evident during the pandemic, Government packages alone cannot ensure that many businesses can survive let alone thrive. As evidenced by the events of the last few days, it is still nearly impossible to budget and plan for the twists and turns the economy is continuing to take, so to future-proof your business, and ensure sufficient cashflow to keep moving forward, there are solutions outside of Government initiatives that the asset-based finance sector offer.
Accessing cashflow through Asset Refinancing
At Ultimate Finance we have designed a range of asset-based lending solutions that allow for targeted and strategic access to cash based on a business’ unique needs and requirements. One of the solutions we offer is Asset Refinancing, whereby a business can unlock the funds tied up into an existing hard asset to inject it back into the business as and when needed. Andrew Ribbins, Group Sales Director and Managing Director of Asset Finance, comments, “Many business owners do not realise that they have access to so much equity via plant, vehicles, and machinery they already own. When facing an uncertain trading period as is expected still over the upcoming months, it could be the number one solution for many businesses looking to raise capital quickly and efficiently, so it is vital that lenders who provide this type of financial solution work closely with brokers, accountants, CFOs, and Finance Directors to help ensure businesses understand there are options already out there.”
What is Asset Refinancing?
Asset Refinancing allows businesses to use existing and unencumbered assets as security to release the equity tied up in said assets – in essence, the business can borrow against its own assets by transferring ownership to the lender and making monthly repayments until the loan is paid back in full. This is a quick and efficient way to release as much equity as possible within tight deadlines as the asset is already procured. And even though the lender becomes the owner of the asset for the remainder of the terms, the business can keep on using it as normal so there are no disruptions to their day-to-day work.
Refinancing helps to boost cashflow so that businesses can keep trading and meeting their ambitions, be it growth, hiring and paying employees, meeting VAT payments or even acquiring new hard assets.
What assets can be used?
Different lenders may provide finance against different types of asset so business owners should always enquire with a lender directly or via an Introducer. Here at Ultimate Finance we provide funding against most types of hard assets so long as they are deemed Durable, Identifiable, Movable and Sellable. Types of eligible assets include:
- Vehicles (cars, buses, coaches, trailers, etc)
- Equipment (dependent on asset)
- Heavy / light commercial vehicles
- Plastics / injection moulding
- Waste processing
- Recycling equipment
- Wood working
- Yellow plant
Andrew comments, “There is a misconception that asset-based lending can be difficult to understand or acquire, but it could not be further from the truth. Here at Ultimate Finance, we have been working in partnership with our community of Introducers and strategic partners such as the British Business Bank and UK Finance to help educate businesses on what some have called ‘alternative’ lending. To us, asset-based lending is as traditional as a business loan, and we believe a tailored solution can help businesses move further by directly addressing their unique requirements so they can meet their next ambitions.”
To find out more about Asset Refinancing and the rest of our funding solutions, get in touch today or register online to become an Introducer and discuss your clients’ requirements with a dedicated Regional Director.