Additional Funding Facilities
SALE & HP BACK / SALE & LEASEBACK
If a business has recently purchased an asset in full, there may be an option to fund via equipment leaseback. In this instance the Hirer would sell their asset back to a Lender, who would then fund that asset for the business by way of a Hire Purchase or Finance Lease Agreement.
This type of facility can provide an instant cash injection and also allows the business to spread the total cost of the asset over an agreed repayment term. A facility of this type normally has to be documented within 90 days of the original asset purchase date.
In order to qualify for the traditional asset funding methods available, an asset normally has to fulfill 3 basic requirements:-
- The asset must have an intrinsic value throughout its life.
- The asset must be movable.
- The asset must be identifiable.
Some business purchases may not be in a position to satisfy the above conditions. In these instances, we may be able to offer funding in the form of an unsecured Commercial Loan facility. Examples of business purchases that may require an unsecured lending facility include:-
- Computer software.
- Refurbishment costs.
- Fixtures and fittings.
- Professional Indemnity Insurance.
- DX Subscription Funding.
- Professional Taxation funding.
- Insurance Premium funding.
INVOICE DISCOUNTING & FACTORING
Invoice Discounting is a facility where a business receives early payments against their sales invoices and a collections service to chase payments from debtors.
Factoring is similar to Invoice Discounting but the business retains responsibility for the collection of payments from its debtors.
These facilities are commonly used by businesses to improve cash flow and can also be used to reduce administration overheads.