Asset finance to tide you over
Ask anyone in business these days for an overview of 2010 and it is almost certain that they would highlight the withdrawal of banks from general business lending as a particular negative in an already challenging period.
The reluctance of many banks to lend has become a serious problem for owners and directors who wish to grow their business. Many of these hardworking and dedicated individuals who are battling to stay afloat are waiting on the dreaded call informing them that their bank is withdrawing from their particular industry. When this call arrives, it more often than not is the final straw for the business in question.
For this reason, businesses are increasingly turning to alternative methods of funding such as asset finance to preserve liquidity and create more certainty, at least in the short term. Those who previously used bank overdraft or loan facilities to fund the acquisition of capital equipment and vehicles are now spreading their risk by using the facilities of independent finance companies.
The UK asset finance industry has also contracted along with the reduction of lenders in the mainstream banking sector. However, there are still around a dozen active asset financiers in the UK, ranging from the subsidiaries of High Street banks preferring straightforward deals to the specialist funders providing bespoke and structured deals for more complex transactions.
This is where companies such as Newton Mearns-based Close Asset Finance, who have recently been advising transportation companies at Hillington Park, come in. The options are quite technical in nature, and interested companies need to check out the full details, but deposits required are usually deal-dependent and repayment periods are typically two to seven years’ duration.