In the UK, hundreds of firms are looking for an asset finance solution. They know that they can potentially borrow money against their assets, but do not know how to go about doing so.
In many cases, firms have tried to borrow money in the traditional way, but have found that banks, building societies and other financial institutions are not interested. Even when they are willing to lend money, many charge high fees, high interest and there are heavy financial penalties for not meeting the repayment schedule.
Fortunately, borrowing money against assets is relatively easy to do and is something most firms can take advantage of. It is providing a lifeline to hundreds of firms.
Finding the right asset finance solution
However, it is important to do research before borrowing money against assets. Firms need to understand how much they can borrow, how long they can borrow the money for and how much it will cost. There is some flexibility with this kind of loan, but it is also important to understand what would happen should repaying the loan prove difficult.
How much can be borrowed
Businesses can borrow against a range of assets, not just their property, plant and machinery. How much will be lent to each firm varies, but typically, the following can be borrowed:
- Up to 30% of the value of raw materials
- Up to 50% of the value of finished products
- Up to 60% of property assets
- Up to 80% of the market value of most types of machinery and plant
- Up to 90% of the value of outstanding invoices
How long can money be borrowed for?
Most of these loans are designed to be short term, in particular invoice financing. However, longer-term loans can be arranged against certain assets, especially property.
How much borrowing this way costs
The cost of borrowing this way varies, but all rates compare favourably with other forms of lending. The exact costs are outlined for each deal to make sure that firms are able to pay the interest and understand the full cost of this type of lending, as well as the cost should any repayments be late.
Speak to us
Those looking for an asset finance solution that is tailored to the needs of their firm can speak to us at Invoice Finance Scotland. We will explain everything in as much detail as is needed. Our clients can speak to us over the phone, e-mail us or fill out our online quote form.