Asset Finance
What is Asset Finance?
We work with over 200 asset finance lenders, offering various flavours of different mechanisms, so to do the entirety of Asset Finance justice in a short write up would be nigh on impossible. Ultimately, asset finance comes in 2 main forms: borrowing to directly fund the purchase of a new asset; or leverage an existing asset(s) to raise capital.
Owing to the breadth of the asset finance lenders’ products and structures, at FBX, we have extensive experience of strategically tailoring solutions to each individual business’ unique requirements.
The majority of financing solutions come under the umbrellas of Operating Lease or Hire Purchase.
An operating lease is an agreement to utilise an asset without transferring ownership of the asset. Typical assets that are normally leased include plants and machinery.
With hire purchase, an initial deposit is paid, with the remainder of the balance and interest paid over time, usually a number of years. On completion, ownership of the asset transfers to the business.
At FBX Capital, we have a team that also focuses on structured off-balance-sheet solutions for buying assets. Many of these more structured facilities can allow a business to hold their assets and the liabilities off their balance sheet, keeping their debt-to-equity ratios low.
Who is it suitable for?
Asset finance can be suitable for most businesses in some form. If a business is looking to purchase a new asset, then that can be done with appropriate asset finance. Equally, if a business has existing assets, but is struggling for cashflow, for whatever reason, then there will be a form of asset finance that allows the business to release the cash tied up in its assets.
As a general, but (not particularly accurate!) rule of thumb, the ‘harder’ the asset is, the more funding partners are available and thus, the lower the cost. It is also worth considering re-sale and the residual value of the asset when considering how available funding is, and the cost. At FBX, we have a strong track record of raising for assets from full fleets of cars through to softer assets such as beds!
What is the process?
The process for raising asset finance is relatively simple, if you know what you’re doing! Whilst the process varies from lender to lender, as a basic rule, expect 1-2 weeks from proposal to pay out for anything under £1m and then that process will be longer depending on size and complexity.
At FBX, because we have availability at (almost!) all the funders in the UK, our approach can be wholly client focused, and therefore, usually we can work with the funders to ensure that terms and structure fit the problem that the facility is supposed to be solving.
To get started, FBX require company details and details of the asset(s) to be financed. Thereafter, we will be able to give indicative quotes almost immediately and discuss the various options available. From there, a decision can be taken as to what to go with, and then there will be an offer, some paperwork and a check on the asset before being paid out.
We are here to help. Contact us for a no obligation quote and advice.
