5 reasons to grow your business with Asset RefinancingPublished on 25th October 2017 2017-10-25T20:48:11+00:00 - Last update on 15th March 2020 2020-03-15T17:59:12+00:00
Whenever you make plans for your business one of the first aspects you need to consider is whether you have access to the necessary funds. However, that can be a challenge, especially if you’re a developing SME. But if you own valuable unencumbered assets, such as equipment, machinery or property, you could apply for Asset Refinance. Asset Refinance, which differs from debt refinancing or debt consolidation, enables you to grow and support your business by releasing equity contained within your own assets. So whether you’re planning on redeveloping your premises, purchasing new equipment or even acquiring a capital injection, here are 5 reasons to grow your business with Asset Refinance. Some of the benefits include:
- Large lump sum
- No usage restrictions
- Continued use of assets
- Effective budget control
- Longer terms
How much can I release with Asset Refinance?
Asset Refinance relies upon the current worth of your business assets to generate a lump sum, so there isn’t a set limit to what you can borrow. In order to offer you a lump sum, lenders will ask for details such as the type of asset put forward, the make and model, the date when it was purchased and its current condition. A qualified surveyor will also be sent to inspect the asset’s condition and carry out a valuation. As such, the potential lump sum that your business could be offered will be equal to the asset’s estimated resale value.
However, some lender may impose their own upper limits, specifying how they are willing or able to lend. So whilst some lenders can lend up to £500,000, others could provide your business with anything £1,000,000 or even £25,000,000. So in order to gain the most suitable Asset Refinance product for your business, you need to work out how much money you need and which assets to include as part of an agreement.
How can I make use of funds gained through Asset Refinance?
The funds that could be acquired through Asset Refinance carry no usage restrictions, so you can use them in any way that you see fit. As such, you’re able to make use of the funds for anything, such as refurbishments, renovations, premises extension, equipment purchases or even as a capital injection. The only barriers that exist lie with how far you’re willing to grow and expand your business.
Can I still use my business’ assets?
Yes. Although the lender gains temporary ownership of the asset throughout the course of the agreement, you can still make full use of it within your business, and shouldn’t experience any changes to how your business interacts with the asset. However, because Asset Refinance is a secured form of business finance, lenders can remove the asset from your business premises if you fall behind in making repayments.
How manageable are the repayments?
Repaying an Asset Refinance agreement usually involves a Fixed Monthly Repayment scheme. Here, you will be required to repay an agreed sum at the end of each month, plus interest. Because these sums are fixed it enables you to plan ahead and budget with your other monthly outgoings in mind. Should you expect any financial challenges, it gives you ample opportunity to resolve any potential issues.
How long does Asset Refinance last for?
Asset Refinance terms can last up 5 years, allowing you to spread out the cost of finance. As such, the longer the term, the less money you’ll be required to pay at the end of each month. However, the longer you have the product for, the more interest that’s incurred. That’s is why you need to work how much your business can afford to repay each month and apply for a term that’s appropriate for your situation.
Looking to apply for Asset Refinance?
Choosing the right product for your business on your own has always been a daunting task. However, if your business contains valuable unencumbered asset, refinancing them could be what you’re looking. The challenge now is choosing which lender to form an agreement with. But with so many lenders available all hoping to strike a deal with your business, knowing who you can trust is no simple matter. Fortunately, we’ve taken out the stress of finding business finance. If you're looking to refinance current assets, apply for an agreement today, or find out more with Rangewell.
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