London, United Kingdom
Unlike conventional financing, asset financing is where the borrower offers some of its assets to the lender to cash a loan. The assets could be an investment with promised profits, inventory, or receivable accounts in order to get the asset finance loan. The lender often asks for a security interest inclusive of the already provided assets.
Asset financing is most often used where there's a short-term loan requirement so that you won't have to go through a longer process such as redefining your business model and projections etc. Most companies and investors prefer asset finance as they do not have to comply with the external funder's creditworthiness and can follow a personalised business model without redefining it as per the funder.
Asset finance solutions in UK do not state such a clause. If the borrower qualifies for the loan the provided assets are usually considered non-collateral on the amount of the loan. The reason behind this is that asset financing is used to acquire cash as a short-term loan in place of a current asset the company/person owns. Cash is usually required for short-term goals such as paying off employee wages, buying raw materials for production, or making urgent payments. Hereby, these loans are easy to reimburse and span over a shorter time. Therefore, it's more appropriate to say that the borrower isn't really buying a new asset or exchanging older ones for new ones, rather it is only squeezing out the cash flow shortfall.
If a company has plans to expand and acquire new assets, the cashflow shortfall can cause hindrance making it difficult for the company to add newer assets to its inventory or profile. In such a case, asset finance proves to be helpful, so the company can keep its growth consistent without disrupting its cash flow. Hereby, the company's financial flexibility improves and increases, as the burden of paying large sums of money is taken off the company's cash flow. The loan payback can be done in phases, as the company has its asset set up as security against the borrowed money.
Small businesses and companies with an arbitrary business model can acquire asset finance loans quickly and easily. Hereby, such companies look up to asset financial services in UK. Additionally, Agencies like Loans Desire also act as asset finance brokers in UK for connecting businesses to asset finance companies in UK.
You can openly discuss with our team, which assets to encash. Personal asset finance covers financing of all sorts of assets, from big tickets such as ships and aircraft to even mechanical parts of machinery. Listing down your actual requirements will make it easier for the team to evaluate which assets will prove to be a strong suit for your business. All the necessary documentation and legal part are thoroughly covered by our team. Hereby, you don't have to stress over the paperwork either.