Leveraging £400,000 Machinery Asset Refinance For £120,000 Cashflow Loan
Your assets can help you unlock cash flow loans through refinancing
When a business approached us with a need for a cash flow injection, we helped them leverage the value of their unique machinery assets to secure an impressive loan from a specialist asset finance lender.
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Asset refinancing allows you to raise funds based on the value of assets that belong to your business. Many businesses overlook the concept of asset refinance, failing to recognise the value in many of their most unique tools.
Almost every type of business will have some form of a valuable asset, especially in specialist sectors. Pharmacists, for example, may be able to refinance based on their dispensing machinery.
For a client who approached Rangewell with a need for a £120,000 cash loan to help them grow the business, their existing machinery assets were able to help them secure the funds they needed with minimal impact to their business.
Why was there a problem?
Cash flow is always a concern for your business. If your profits aren't up to scratch and your income is falling, you may be left struggling to stay afloat as you can't pay suppliers, employees or clients.
In this case study example, our client had already foreseen their need for a cash loan to help restore a healthy capital position and fuel future growth. In order to raise said loan, they needed to find a lender willing to offer a fairly significant sum of money.
With standard business loans, security is generally taken from your personal assets or your business and the loan offer is based on all manner of metrics such as financial performance, personal expertise etc.
In asset refinancing, the lender instead looks at the value of the assets you want to loan against and then offers you a loan secured against them. In our client's case, their machinery was valued at £400,000 but was owned outright.
The problem was clear: could the client expect to raise the £120,000 loan they needed without sacrificing their assets or accepting poor terms based on other business factors?
Why we were able to help
When Rangewell works with you, we'll discuss your entire business and your goals before ever suggesting a specific type of finance. In this case, we recognised that the high value of the client's machinery and the fact they owned them outright would enable us to broker a strong asset finance deal.
We then turned to the asset finance lender's market and found a lender interested in the loan. We were able to help the client portray not just the fixed value of the machinery, but the ongoing increase in value they presented due to their benefits to the business.
The lender was then happy to offer a superior loan agreement to any other type of business loan available to the client. Their original need was for £120,000, but they were offered and accepted a £270,000 asset refinance loan with low interest.
Leverage your assets
If you've got valuable assets in your business, refinancing them allows you to raise loans without the same risk or exposure as other forms of business loan, instead focusing on the assets themselves.
We can help you make the most of these assets by guiding you through the lender's market, identifying the right deals and negotiating on your behalf. Get in touch today or visit asset refinancing to learn more.