EXPERT HELP WITH YOUR ASSET FINANCE
What is Asset Finance?
Asset finance, also known as equipment finance, is a type of business finance that can be used to purchase or lease assets such as machinery, vehicles or other equipment. The key feature of asset finance is that the asset being financed is used as collateral for the loan, which means that if you default on the loan, the lender can seize the asset. This type of financing can be used for new and used assets and can be structured as either a loan or a lease. Asset finance can be a useful tool for businesses that need to acquire new assets but don’t have the upfront capital to do so.
What Assets Do You Finance?
At Equipment Finance we provide asset finance for movable assets such as construction equipment, mining equipment, back up power supplies, manufacturing equipment, medical equipment and telecommunications equipment.
What Are The Benefits of Asset Finance?
Asset finance offers businesses a number of unique benefits which include some of the following:
Benefit #1: No Upfront Investment
Equipment or assets, particularly large equipment like yellow machinery and trucks, can be a costly capital expense that needs to be planned for well in advance. It might take a year or two for enough capital to be raised to purchase the required assets.
Your money is tied to the asset until it’s one day sold or disposed of, and even so it depreciates in value everyday you use it.
When your capital is not tied up in assets or equipment, you can better manage cash flow and pursue opportunities you may not have been able to before.
Benefit #3: Avoid Storage and Transport Costs
If your business has acquired expensive new equipment, you will need to foot the bill for a storage solution. Inadequate storage can result in lost, damaged or stolen equipment. For mining equipment, this may be a fenced in yard and private security company. If you’ve purchased argricultural equipment, you will need to pay for transport costs to your premises which can cost a fortune.
Equipment finance is a great way to save on transportation costs. You don’t have to worry about logistics when transporting equipment from one location to another because assets can be delivered and collected at your convenience.
This enables you to respond quicker to different needs at different locations and help you streamline your operations, save time and cut down on costs by ensuring you always have the right equipment at the right time and place.
Benefit #5: Strong Borrowing Power
Banks don’t always view rental expenses as a liability in the balance sheet, giving you a better footing to apply for business loans or other types of finance. Therefore, opting for asset rental finance can help a company maintain its borrowing power.
Benefit #7: Explore New Opportunities
By reducing operating expenses and improving cash flow management, you are freed up to pursue opportunities you may have not been able to had all your cash been tied up in assets. By getting fast and easy access to asset finance, you can widen the scope of services you offer to customers or open up a whole new department.
Benefit #2: Reduce Long-Term Expenses
Many companies have maintenance teams who are responsible for the upkeep of machinery to ensure the business continues to run smoothly. Services need to occur regularly, parts may need to be changed and technology must be upgraded to keep up with the times. So it is safe to say, maintainence costs on expensive equipment can be unpredicatble.
However, with asset finance, all maintainence is included in your monthly repayment fee which makes budgeting and managing your cash flow a much more predicatble task.
Benefit #4: Tax Savings
Asset finance is a tax deductable while equipment purchased upfront is subject to a depreciated rate for its entire lifespan.
Equipment rental finance expenses tend to be more flexible than major capital-expense purchases. They could be written off as project expenses in some cases or may have a tax-deduction benefit depending on the nature of your business.
Benefit #6: Improve Productivity
Managers and business owners will agree that losing time on a job site can quickly eat into profits and affect compliance. It’s unproductive for staff to wait around for equipment to arrive or to sit idle if there’s a breakdown.
Asset finance empowers your business with on-demand delivery and pick up of equipment at a stipulated time.
Professionals are also on-hand to service and maintain the equipment, so breakdown’s become less likely and should they occur, you will receive swift assistance to repair the fault or get a replacement.
Benefit #8: Added Flexibility
There are many factors that require flexibility in today’s business market. These include the threat of recession, inflation and razor-thin profit margins. Companies can pursue asset finance to meet the needs of niche markets, weather financial fluctuations and keep up with fluctuating demand.
Asset finance is a flexible way to acquire new equipment, especially when it’s in partnership with trusted equipment finance partners.