It’s no secret that banks and traditional financial institutions are not lending as much as they once did, and this is making it increasingly difficult for many businesses to raise the funds they need to expand and take advantage of new business opportunities. Fortunately, there is an alternative, and it’s one that more and more firms are using.
This alternative way of borrowing is called asset financing. The way it works is straightforward, which is perhaps the main reason it works so well and is growing in popularity.
Simply put, a firm takes a physical or financial asset that it owns, or part-owns, and uses it as collateral for a loan. The list of assets a firm can use as security is long, and here are just a few examples:
• Property
• Equipment and plant
• Materials
• Vehicles
• Shares
Most firms own at least one of these, so can take advantage of this form of borrowing.
Additionally, the decision-making process for this form of finance is fast. All firms need to do is to prove that they own the asset. There is no need to put together a business plan to justify the loan.
Once a firm does that, the asset finance broker will quickly explain how much can be borrowed against that particular asset. They will usually explain the terms and the cost of the loan.
If you need more information about this innovative and accessible way of borrowing money for your business, speak to us at DJB. We are here to find ways to help you to solve any business cash flow problems you might be facing.
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