Asset finance is typically used when a business needs to acquire an item or items of capital equipment such as cars, vans, plant or machinery. A business will normally buy assets to fund expansion, replace existing equipment that has become costly to run, obsolete or to service a contract with a particular client. The loan facility is secured against the asset, with the finance company taking a financial interest or “lien” over the asset until such times as the loan is repaid. If your business has an asset finance requirement or you would like to know more about how asset finance works please contact us
What determines if an asset can be financed?
The general rule is that to qualify for asset finance an item of capital equipment should be D.I.M.S.…..this acronym means:-
D - Durable I - Identifiable M- Moveable S – Saleable
In simple terms you should be able to see, touch and move the asset for it to be suitable for asset finance. Examples of the types of assets we have financed at Thames Valley Asset Finance can be found by visiting our case studies
Okay I understand that, so what type(s) of equipment are suitable for asset finance?
If an asset meets the D.I.M.S criteria it can all likelihood be financed, however listed below are some of the more popular assets that TVAF is asked to finance.
Printing equipment (to included Printing Presses and finishing equipment)
Engineering equipment – CNC lathes/mills, metal fabrication equipment
Wood working lathes
Injection moulding machines
Restaurant/kitchen equipment, furniture
Marine and aviation for business and private use
Other “miscellaneous” items can also be financed such as software and office “fit outs”. However, the “unsecured” nature of such equipment means that this is usually only available to businesses that have a strong trading history (i.e. robust cash flow and a strong balance sheet) or where additional security is pledged. If your business is looking to finance an asset(s) not listed above please contact us, we have a range of asset finance solutions designed to help you.
So why should a business use asset finance?
There are some very good reasons for a business to use asset finance, these can include:-
Preserve bank working capital facilities for day to day trading (e.g. don’t use an overdraft to fund long life assets)
Fund the cost of an asset purchase over it’s useful working life
Fund business expansion (i.e. the acquisition of a competitor, organic growth)
Tax efficient
VAT can be spread over the term of the agreement with some asset finance facilities, thus assisting cash-flow
Existing assets (unencumbered) can also be re-financed enabling the cash to be used for expansion or acquisition costs
Thames Valley Asset Finance has a comprehensive range of asset finance solutions for you business. Discover more by visiting our section on types of asset finance
What type of businesses and business sectors can use asset finance?
We are able to arrange asset finance facilities for sole traders, partnerships, Limited Liability Partnerships (LLP’s), Limited Companies and PLC’s. This extends to certain types of charities, educational bodies (i.e. schools) and company directors purchasing cars in their own personal name for tax (benefit in kind) purposes.
TVAF provides finance for businesses operating in many different sectors to include but not limited to:-
Agriculture
Manufacturing
Construction & Demolition
Medical & scientific
Distribution
Plant Hire
Engineering
Printing
Equipment sales
Recycling
Food preparation/production
Telecoms
Haulage
Transport
Hotels
Vehicle Hire
IT
Warehousing
Leisure
Waste disposal
Still not sure if asset finance is suitable for your business?
Please telephone us on 0844 561 7426 or contact us via our website
What information does my business need to provide, to get an asset finance facility approved?
Once a business has identified what equipment/assets it needs to purchase, Thames Valley Asset Finance will normally need the following information to get the finance facility placed with a suitable lender:-
Set of last statutory accounts
Management accounts and or latest bank statements
Background on the business and it’s directors
Full details of the equipment and the supplier(s)
Rationale for the asset purchase (why is the business investing in new plant/machinery?)
Where the transaction is for a modest amount or for a standard asset (e.g. cars, commercial vehicles etc) the process if often simpler and finance can often be secured quickly via a telephone call (and with the provision of much less information). For larger asset finance loans and more complex transactions a full in depth proposal may be required, this can often mean a site visit by TVAF to see the business and its owners.
If your business needs to move quickly to secure asset finance we can help. Please telephone Thames Valley Asset Finance on 0844 561 7426 or contact us.
What size of asset finance loan can TVAF organise?
We have no set parameters and judge each businesses requirement on merit. However, as a guideline our minimum transaction size is £10,000 and our average asset finance loan is £40,000. We do however finance over £10 million of assets each year and have completed asset finance transactions as large as £1m on sizeable items of plant/machinery. See our case studies for further details on how TVAF makes asset finance quick, simple and easy to arrange.
What if our company has an on going capital equipment acquisition program?
We have many clients who have a requirement to purchase plant and machinery throughout their trading year. This is particularly relevant in the vehicle, construction and plant hire sectors. TVAF can arrange annual credit lines for your businesses asset finance needs. This ensures that a customer always has readily available credit lines to meet ongoing capital equipment needs. Does your business need a credit line? Please contact us for further information on our range of asset finance solutions.
What type of asset finance facility is suitable for the assets my business is purchasing?
There are a number of asset finance facilities that TVAF can offer; these include Hire Purchase, Finance Lease and Operating Lease. The tax implications and accounting treatment of the asset (on or off balance sheet) vary accordingly. Your company accountants or auditors should be approached to ensure that you structure the asset finance agreement in a way best suited to your business.
For a detailed explanation of the types of asset finance facilities Thames Valley Asset Finance offers, please view the types of asset finance section of our website or contact us.
