We want this experience to be as fast and as simple as possible, so we can fund you ASAP. As we do this every day, we thought we should share some tips with you, and highlight the common mistakes that get made. Please take a moment to watch as there is sure to be something in this short video that will be of assistance to you.
It’s our aim to help as many small and medium-sized businesses as possible, and we have been successfully doing just that for years, so let me assure you, you’ve come to the right place.
Now, whilst Ive got you, there are a couple of important things you need to know. Firstly, we are all about speed, honesty and transparency, and one of my fantastic team members will be in touch with you very soon, during business hours, to have a quick, No Obligation chat with you to discuss your application. It should take no more than a few minutes.
Secondly, we ask that you DON’T apply with any other lenders until we can chat with you. Now I don’t say this so we can do a hard sell on you. No, it’s simply because… unlike us, most other lenders will automatically do a credit check on you as soon as you apply.
Sadly, the more hits on your credit file, the lower it will make your credit score. So, hold tight for one of the friendly Homesec team members to call. If we can help, we will.
If for some reason we can’t, we will go the extra mile and point you in the right direction.
The financial market of New Zealand has many products to choose from. Each of these products has unique features to fit the varied needs of the borrowers. Business asset finance is a popular loan type among business owners.
Companies need new equipment time and again to grow & sustain in the rapidly evolving market. Asset financing can be the ideal solution in this case. It is better to gain adequate knowledge before you decide to take out any loan type. Continue reading for some additional information.
Asset financing is short-term business finance that uses a company’s assets (Machinery, Equipment, invoices, real estate assets) to borrow money or obtain credit. Asset Finance gives businesses access to assets and equipment without depleting the funds needed to pay employees and track cash flow.
You can use Asset finance to purchase or lease a vehicle, machine, or office equipment. Asset Financing Loans include construction equipment, imported machinery, office furniture, and coffee machines. No matter how unique or unusual, if the asset you have in mind is central to your business, you can apply for asset financing.
There is a wide range of options in leasing and installment purchases, with some options better suited to the asset you are looking for than others.
It is also known as vehicle inventory financing, as it can finance company vehicles only. The business lender purchases the car needed for the business, and the borrower repays it in installments over the agreed lease term. Service costs and maintenance are the borrower’s responsibility, as is the disposal of the vehicle at the end of the lease.
This is a term lease that does not pay the total cost of an asset, often a special-purpose machine, because it is leased for a period of less than its useful economic life.
Often cheaper than equipment leasing because the company only pays an estimated value for the item over the agreed limited lease period. The leasing company will be responsible for maintenance and recover the asset at the contract end.
It allows you to purchase an asset over an agreed-upon period by dividing the cost. The item appears on your balance sheet, and insurance and maintenance are your responsibility. At the end of the term, the asset will be yours.
In this type of asset financing, the business lender purchases the asset your company needs and rents it to you. Providers bear the cost of maintenance and repairs. You only must pay a fraction of the total value upfront. It is ideal if you want a high-quality, expensive manufacturing machine but need more funds to buy it outright.
Generally, you must pay the first month’s rent in advance while the rest is spread over the rental period. At the term end, you can continue leasing, purchasing, or simply returning the device. It is especially popular with companies that need help to make medium-term financial forecasts because they need to respond to rapid change.
Also known as capital leases, long-term leases are designed for the useful life of an asset. Get the most out of your facility, pay it back over time, and be responsible for maintenance and insurance.
Payments generally continue until the lender recovers at least 90% of the cost of the property value. Lenders can provide a percentage of the value after the item is sold, but your company does not have the option to purchase the asset directly.
This option is different as you secure a loan against an asset your business already owns (such as a vehicle, equipment, or commercial building) to free up the cash your business needs. When you refinance an asset, the lender makes an offer based on the equity you hold in the asset. Unlike short-term business finance, it means you can free up cash from your partially-owned physical assets.
The refinanced asset must be physically removable to be considered collateral for the loan. The amount you can borrow is dependent on the asset value that releases the cash. If refinancing is agreed upon, the lender will pay the provider in installments over the agreed term, including interest on the loan.
Let us now check out how a business asset loan can assist you in growing your business.
With various financing options available, asset financing offers business owners a flexible solution to purchase equipment critical to their growth.
The process of buying assets with Asset Finance is surprisingly easy. Just identify the assets you wish to purchase and the supplier you want to purchase from and provide supporting documentation such as past business accounts (this varies by the funder). Then approach a panel of lenders to find the best deal for yourself. The process is surprisingly quick, with funds disbursed within days.
Purchasing and prepaying for expensive equipment is impractical and can hurt a company’s cash flow. By funding equipment through asset business lenders, businesses can spread costs over a while and free up cash flow for other uses that support business growth.
Payments for certain asset financing agreements are tax-deductible business expenses and are available for investments. If you purchase equipment, machinery, or vehicles (known as plant and machinery), you can deduct some or all of the item’s value from your profit before paying the taxes.
You can claim a capital deduction if your equipment is a:
Any business, regardless of size, can benefit from business asset finance, small companies looking for growth and access to the facilities they need to do so. Asset financing is available to limited liability companies, public companies, and sole proprietorships to help spread the cost of the assets a business needs.
Asset finance is a great way for businesses to use current assets such as a real estate property or machinery and equipment of a business to secure funding. Alternatively, asset finance can be used to purchase new machinery or equipment. Any equity in these assets can be used to secure a short-term business loan. The purpose of the loan does not need to be for the purchase of equipment but can be for any business purpose such as cash flow or business expansion.
One-third of the business owners have utilized business asset finances to provide funding to their businesses. According to a survey, 29% of companies used asset funding, among which 20% have bought new plant or equipment with it. A large number of businesses used it to obtain working capital as it is a quick and easy option of funding.
Examples of Asset include
What makes hire purchase and finance leasing different is that hire purchase allows you to have the asset at the end of the settlement. But a finance lease lets you borrow the property for a certain period.
To know what asset finance is practically, here is an example.
Suppose you own a manufacturing company. You might need new pieces of machinery to increase production to fulfill market demand. You require the machines immediately for your company, but you do not have enough money to buy the assets.
After examining thoroughly, you choose to hire. The advantage of this purpose is that it does not ask for a deposit, the financing can provide the full purchase price.
Asset finance, can also be known as bridging finance, they operate quite differently than other finances. Bridging finance requires equity in real estate asset to secure the funding.
Bridging finance can allow you to borrow up to 75% of the value of the property including your current mortgage.
Recently, as business owners have realized the advantages of asset financing, it is becoming popular with time. Their popularity is because they are a quick and easy option to secure funding for your business.
There are several benefits of hire purchase-including
Finance leases provide many advantages to businesses such as
Asset finances are primarily for every sort of business which includes SMEs. It allows acquiring a high-value item and provides support to the business’s development. To obtain asset finance for a business you need to have a registered NZBN number
Business owners can obtain asset financing from one to seven years. In some cases, if the asset is of higher value, then the time can get extended. The asset financing lender gives a specific period to pay the asset price back, including the interest amount to the business owner.
Another significant factor determining the period for which the lender will provide the financing is how long you will use the asset and how fast you have to pay the money back to the lender. The finance borrower must provide some proof to ensure they can make the payments easily.
Asset finances are the short-term business finances that every company may require at some point in time. It assists your business in reaching the peak of success. So if your business needs assets to grow the manufacturing rate, asset finances are the superior to consider.
Most small business owners at some point in time will fall short of cash during the running of their business. Due to this, a business owner may need to find funding solutions as cash and capital are the lifelines of running a business, a sufficient cash flow is necessary. When the business owner fails to have sufficient cash flow to continue operations, they can seek alternative funding to assist with the operation of the business. One solutions is to seek out asset finance.
Asset Funding allows the business owners to boost cashflow or assist with expansion or purchase of much needed equipment. The reputable lenders of business finance such as Homesec Business Finance in NZ approve the application against security that the owner provides. A quick and easy process of accessing the cash for the business is to leverage the business assets or real estate assets to provide a cash injection. Some business owners still do not understand the significance of asset funding, which provide a quick and easy solution for acquiring the funds they require.
The different types of asset funding available for short-term business finance are as follows.
Invoice factoring is one of the popular types of asset funding for cash against the outstanding invoices of money that is owed to a business. The process includes releasing cash against the debt before the invoice is due. The advantage of this type of asset funding is that capital is readily available to business owners. The provider will collect outstanding invoice directly from the customer. The factoring service company will generally release from 60 to 90% of the invoice depending on who the supplier is.
Sometimes business owners need to purchase equipment or assets for their business growth. A finance lease will help the borrower to retain the cash flow they could use for making the purchase. During the repayment term, the borrower pays back the capital with the interest thus easing further pressure on the cash flow.
Bridging finance is defined as short-term business finance that helps the borrower to overcome various problems when there is shortfall in cash flow. Bridging business loans provide access to cash quickly using available equity in real estate, the loan is repaid within a short period of time, either from increased cash flow or sale of an asset.
Exporters require the necessary funds for supporting the advancement of the massive orders of export. This funding will ease the cash flow pressure for the short term, especially applicable for the massive export orders, requiring more time for completing the manufacturing.
Homesec Business Finance has an easy online application process where you only need to provide minimal documents to have the loan assessed, these include a copy of a rates notice, current mortgage statement and ID. If there is sufficient equity in the real estate asset then you are more than likely going to be approved.
Other lenders also ask for a detailed business plan on how the new asset or property will assist the owner in enhancing the profit or efficiency of the company. Full financial statements are also required by some lenders but not at Homesec Business Finance.
Asset finance is especially beneficial to start up businesses as they do not have the financial trading records to support a standard business loan. Another advantage of asset funding is that the business owners do not have utilise their own cash resources, instead, they can implement those funds for the stock, overheads, payroll, and various operational costs. By obtaining asset finance for the business it can assit with expansion and see the business grow and succeed.
Unlike traditional loans and overdrafts, asset funding comes with easier terms and conditions. The applications for asset funds also get processed at a faster pace in comparison to other loan types. So, apply for one and take advantage of the benefits of this loan.
152 Fanshawe St,
Auckland, 1010, New Zealand
09 888 6550
Business Hours
9am to 7pm
Monday to Friday (excl Public Holidays)
HomeSec Business Finance Limited
NZBN: 9429047936010