How to choose the right asset finance solution for your business

Securing finance for your business is part of a broader strategy to help your business achieve a particular goal. Your broker’s role is to design a finance package and loan structure to help take your business to the next level.

The first step in your asset finance journey is to think about the goals you’re trying to achieve. 

These may include:

  • Increasing sales – by opening a new business unit or stocking up on inventory.
  • Expanding your operation – by investing in new plant and equipment.
  • Boosting efficiency – by upgrading your existing equipment or tools.
  • Refreshing your tech – by purchasing new IT equipment.

Next, with the help of your accountant, make sure you understand your financial position, including your cash flow and balance sheet.

From there, your broker will work with you to create a personalised solution that aligns with both your goals and financial position. Options include:

  • Invoicing finance
  • Cashflow funding – credits, overdrafts
  • Income generating assets – cars, trucks, logistics, boats

These different options come with different costs, risks and tax implications, which your broker and accountant will explain to you.

Solution first, rates second

You’ll notice we haven’t mentioned interest rates and fees. That’s not because those things aren’t important – they are – but because they shouldn’t be the first thing you consider.

Instead, the focus should be on designing an asset finance solution that will help you achieve your goals. Once that’s been done, your broker will look for the most cost-effective way to implement the solution, which is when attention turns to rates and fees.

Finally, once you’ve secured your asset finance, it’s important to review it on a regular basis – because if your financial position or goals change, you might need to alter your loan structure or refinance to a different finance package. Again, your broker and accountant will help you with this review process.

Please reach out if you’re interested in increasing sales, expanding capacity or boosting efficiency. I’ll explain your options so you can make an informed decision on how to proceed.

Published: 14/5/2024

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