When it comes to business growth we often think about expansion, investing in the latest products and maintaining a healthy cashflow. One of the biggest barriers stopping SME owners from reaching their potential is a lack of access to funds. That’s where asset refinance comes in.
Refinancing for business growth
Many business owners’ operations heavily rely on tangible assets such as plant and machinery. However, these can often be costly and tie up a significant amount of capital. With the emergence of alternative funding facilities like asset refinance, business owners no longer have to rely on the limited options available from high street banks.
Refinancing your existing fleet of vehicles, equipment and machinery is a powerful way to make your current assets work harder for your business. Not only this, you can also release capital to support with business plans such as expansion. This can include opening new locations, investing in current property and even using the money to purchase land.
Unlock capital tied up in existing assets
The volume of businesses using asset refinance as a funding tool has seen an increase over recent years, however there are still many who are unaware of the product. Asset refinance creates ample opportunity for your business by unlocking capital from your machinery, vehicles and equipment without restricting the ability to continue using them or selling them outright.
In short, asset refinance works by selling your assets to a lender for a sum based on their current working value.
It doesn’t matter if your assets are currently being financed by a lease or hire purchase agreement as refinancing allows you to consolidate those debts. In most cases, doing this will also reduce your monthly payments.
An immediate and ongoing solution
Asset refinance can provide business owners with both an immediate and ongoing solution. It essentially kills two birds with one stone. You can inject working capital into your business straight away whilst also reducing your company’s monthly outgoing.
The simplest way to determine whether asset refinance is the right option for your business is to consider the ‘3Rs of Refinance’:
Review: Take a note of what assets your company uses and operates. How much are they worth? What amount of equity do they hold? Which of your assets are being finance and which are unencumbered?
Release: If your company’s tangible assets (commercial vehicles, construction equipment etc) hold equity, refinancing them will provide you with the means to unlock their value and deposit cash into your business’ bank account. This is done within a matter of days, with facilities being structured to suit the needs of your specific business. This can include seasonable adjustments, ensuring that payments are manageable.
Reduce: If your assets are currently encumbered, they can still be refinanced. Consolidating multiple agreements can lead to a significant reduction in monthly payments, on top of the lump sum injection of working capital by refinancing the assets themselves.
Keep your business on track
Although ownership of the assets moves over to the lender until all payments have been made, the assets remain in your possession, meaning that you can continue to use them.
Refinancing can provide the capital required to make several opportunities possible for your business. Whether that’s developing new markets, expansion or relocation. It’s an affordable solution for business owners who want stability through debt consolidation, reducing monthly repayments or paying HMRC arrears.
In a time where traditional banks can’t fulfil the needs of small businesses, alternative lenders are bridging the gap. They’re providing a relationship-first approach and taking the time to understand and tailor funding packages unique to the needs of their customers.
Making the most of asset refinance
PMD have access to a panel of over 160 reputable lenders, ensuring that you’ll always get the most suitable finance facility to suit your business needs. We’ll also aim to secures the most competitive rates available to you.
Whether you’re looking to raise capital to grow your business, invest in new commercial property and sites, or consolidate your existing facilities, asset refinance is a great option and our experts will be able to support you every step of the way. To find out more about the process, get in touch with us on 0161 633 2548 or info@pmdbusinessfinance.co.uk. Alternatively, you can stay up to date with us on LinkedIn.