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Quick turnaround

This month we were approached by a company who specialise in design and manufacture. They contacted us at the beginning of the week to discuss the purchase of a commercial vehicle to add to their fleet. After a short telephone call, we proposed the deal to a funder and within just 2 hours we had an approval. The finance documents were raised and signed and within 48 hours the transaction was complete and the funds were released. This shows how quick a deal can go from start to finish with both the customer and supplier being very happy with the speedy turnaround.

Stay ahead of competition

We were previously approached by a manufacturing company who specialise in producing high quality office furniture. They wanted to purchase some cutting edge machinery to replace their existing assets which would enable them to keep up with the current industry and continually grow their business forward, especially as the woodworking sector has now picked up after a tough few years. After researching the company and having a short meeting, we proposed the deal to a funder and an offer was issued over a sensible term that was suitable for the customer. They required the deal to be completed as soon as possible for their cash flow and shortly after the deal was agreed the funds were released. They can now continue to grow their business and go from strength to strength due to having higher profit margins by paying back the balance 48 months.

Re-finance of assets

We were approached by an engineering company that required a cash injection into the business as a quiet trading period left them almost on the limit of their arranged overdraft. We evaluated the business and decided that the best course of action was to re-finance its manufacturing assets and generate capital which could then be put back into the business to assist with cashflow. The company owned four CNC machines which were used to generate £30k. An offer was issued and the funds were released to the customer 7 days after our initial conversation. With funds now available for raw materials and overhead costs the company can continue to trade without the worry of running out of cash. The deal was structured so the client would pay back the balance over 36 months, repayment costs are built into the companies cash flow forecast meaning all expenditures are now accounted for.

Another new product from AF Group

We are pleased to announce the launch of a new development finance product aimed at UK property developers, private builders and self build clients. There are packages to suit all needs, from renovating a single property to funding a complete development.

- The criteria is as follows:

- Loan size £150K-£1m

- Residential, investment and commercial developments  considered

- First charges required

- LTV’s up to 60% of GDV

- Interest rolled up

- Typical term is 6-12 months, longer terms can be negotiated

Asset Finance UK continues to deliver

Asset Finance

We were recently approached by a woodworking company which had ordered a new £250k machine for delivery in December. They already had an offer on the table from their own bankers but were looking for improved terms. We were able to offer a deal with just one payment down on a 5 year lease, which matched the business’s requirement and was far superior to the bank’s request for a 10% deposit.

New Start Business Funding

WB was starting a new engineering business, and was looking for £60,000 in addition to funds which had already been released from his main residence. His bank had spent three months reviewing the proposal, and despite there being a mortgage free commercial property as security, declined the deal. Within 3 days we offered a start up loan through a specialist commercial lender, and the funds were released the following month.

Short Term Lending On Our Own Book

H was introduced to us through his accountant, and runs a vehicle repair business. He was in the process of completing on a commercial mortgage on a property next to his existing premises when at the 11^th hour the lender reduced the offer. This left him needing to find £20,000 or risk losing the property and his deposit. After reviewing the valuation, we funded the deal ourselves with a bridging loan which was paid out within 24 hours.

Innovative New Product Launched

We are pleased to announce the launch of a brand new product aimed at new start and fledgling businesses.

With the banks declining the majority of new proposals, we feel that this is an opportune time to get the message out into the market place that funding is available for a wide variety of projects.

 The key elements are as follows:

• Funding from £25k to £1m available for UK based businesses.
• ALL industry sectors considered.
• ALL requirements can be funded, i.e. plant & machinery, IT equipment, and working capital.
• Deals can be structured on a Finance Lease or Commercial Loan.
• Flexible repayment terms from 3 – 7 years.
• Quick decisions made.
• Funding can be drawn down in as little as 4 weeks.
• Charges taken over property as security.

Case Study

An experienced restauranteur based in Yorkshire  was looking to convert an old Indian restaurant into a contemporary bar and grill. Funding was required to refit the kitchen, bar area, install EPOS systems and for marketing. Despite having an impeccable track record, and offering a charge on his property he could not obtain bank backing. We were able to provide £50,000 of funding through a finance lease on the equipment, with repayments over 4 years.

Asset Lenders fill the void left by banks

As we enter 2010 the outlook for the UK economy remains mixed. Commentators are divided as to whether the economy will slowly start to recover, or whether we will see the second part of a ‘double dip’ recession before the start of any recovery. Although the downturn has been the worst since the 1930’s, the recession has inflicted much less pain than was expected. This was due in part to the unprecedented intervention by the Government and Bank of England. Interest rates are likely to remain at their historic lows until the end of the year which will provide some comfort. 

The banks, especially those now owned by the tax payer, are coming under enormous political pressure to increase lending to the SME sector. In response the banks are making the right noises about turning the taps on again, but the jury is still out as to whether or not the businesses with the greatest need will be able to access funding. 

There is however much better news from the Asset Finance sector. This part of the lending arena is populated by a number of independent specialist lenders, and has proved to be remarkably buoyant in the face of testing market conditions. Asset Finance UK enjoyed a record final 6 months in 2009 and are extremely confident going into the New Year. Nigel Mckenzie, Director of Asset Finance UK points out that: 'Asset lenders put a great deal of emphasis on the underlying security, and this enables them to take what I would call a ‘commercial’ view, allowing them to lend where banks can’t.' 

One of the main criticisms being levelled at banks at the moment is the time it takes for decisions to be made, time that business owners simply do not have. Asset Finance however can be arranged swiftly, with approvals being granted in a matter of days, and deals paid out shortly afterwards. Traditionally lenders look for a minimum deposit of 10%, but as Nigel explains this is not always the case: 'I have just paid out a deal on a £300k machine with just one payment down over a 5 year period. I have also funded dust extraction equipment on similar terms, and these deals demonstrate that there is real commitment to lend, even on non traditional assets.' 

Aside from the slow decision making there is also a great deal of frustration in the business community at the aggressive behaviour of some of the banks. As they look to rebuild their reserves pressure is being applied to SME’s. As the MD of a large conservatory manufacturer told us: “We’d always enjoyed a good relationship with our bank, and business was good despite the slow down. It came as a massive shock to us when our manager told us they were reducing our overdraft by 50%.” In this case there was a positive outcome, and after contacting Asset Finance UK, the bank was repaid by refinancing some of the equipment. Nigel concludes: 'Refinancing existing assets is becoming an increasingly popular option. Cash flow is improved and business owners can concentrate on running their businesses as opposed to worrying about their bank manager'.

Despite the best efforts of our politicians, small businesses are still struggling to get hold of funding. The spokesmen of the main UK banks may disagree, but anecdotally at least; one of the main complaints of business owners is the inability to get backing. Indeed, in some quarters there is the feeling that there is no point in even asking for funds, as the answer will be ‘no’.

There is however, good news from the Asset Finance sector, which remains active, despite the recession. Nigel McKenzie, MD of Asset Finance UK believes that there is still plenty of room for optimism, "Whilst it’s fair to say that the high street banks are reluctant to help, there are a number of specialists out there with money to lend, and importantly, a commitment to actually lend."

The main change, post credit crunch is that lenders are putting a greater emphasis on lending against good quality assets. Whereas in the past it has been possible to raise finance against virtually any business asset, the reality now is that deals have to be backed up by assets with a tangible re-sale value.

Traditionally business owners have always spoken to their own bank when looking to finance new investment. However, many high street banks have now closed their asset finance divisions, and those that remain have strict underwriting criteria. So if the answer is ‘no’, where do you turn to? The answer is to approach an independent finance company, as by speaking to one person you are getting access to a range of specialist lenders. They can find out your particular requirements and then introduce your proposal to an appropriate lender, saving time and frustration. Adam Knight from Asset Finance UK explains the benefits "We recently agreed a deal on a 250k CNC machine with just one payment down on a lease deal over 5 years. This was a vast improvement on the offer from the client’s own bank who wanted a 10 to 15% deposit".

The current recession is the first that many of today’s business owners have encountered, and some are learning the hard way that it does not always pay to have all your eggs in one basket when it comes to finance. We spoke to the MD of a staircase manufacturer in the North East "We'd always banked with one of the main banks, and always used them for all of our borrowing requirements, whether it was factoring, asset finance, or overdraft.  A year ago, when things got tough, we needed an extension on our overdraft for a couple of months. We went back to the bank as normal but they could not lend us a dime as we were up to our limit across all areas. With the benefit of hindsight I now realise its best to borrow from as many different companies as possible, that way I can keep my options open."

Whilst we are unlikely to see a return to the easy credit of the past few years, it is encouraging to report that there are still products available, and not just for larger companies. Nigel adds "We are seeing demand from all types of business, including new starts and recovery situations. The pleasing thing from our point of view is that there are products out there to suit all companies. By looking at a proposal from the overall asset perspective, it is possible to structure packages to suit all businesses."

Asset Finance UK remains committed to the market

The credit crunch is no longer front page news, but its effects are still being felt in the marketplace. Whilst a number of specialist lenders have closed their doors to new business, here at Asset Finance UK, our doors remain firmly open.

We have our own funds to lend, and are able to structure deals that you cannot get through traditional high street lenders. As we are primarily asset led, we can cater for a wide variety of situations and are always to happy to talk to new clients, even if you have been turned down by your own bank.

AF Recoveries tackles commercial debt

As the recession takes hold, late payment or even non payment of bills is becoming a reality for many businesses. In response to this tough economic climate, Asset Finance UK Ltd is pleased to announce the launch of a new service, AF Recoveries.

Headed up by Peter Middleton, AF Recoveries provides a full range of services, from pre legal telephone calls all the way through to county court and insolvency procedures. There is no charge for any initial consultation and work is accepted on a no recovery, no fee basis.

As Peter explains “Effective credit control and cash flow has never been more important,” and by instructing AF Recoveries “you can ensure that your bill is the first to be paid.”

Businesses look for alternative funding amidst crunch

The asset based finance industry continues to grow despite the severe downturn in the economy. 2008 saw asset based lending (ABL) grow by 9% on the previous year, and unlike other areas of finance growth is set to continue.

Businesses are realising that ABL is a particularly useful tool: capital can be raised to fund expansion, or to solve cash flow issues.

As Nigel McKenzie explains, funding is still available for the vast majority of businesses, large or small: "There's a lot of doom and gloom about and the media don't help. Some people are afraid to ask for finance but the good news is that there is still plenty of funding available. Asset lending is a great facility for companies and the lenders are well and truly open for business."

UK Base rate now just 0.5%

The Bank of England has cut rates yet again, and the official lending rate now stands at just 0.5%.

The latest cut is accompanied by the implementation of a policy known as 'quantitative easing', which is an attempt to stimulate the economy by increasing the money supply. This marks a leap into unchartered territory for policy makers, and it remains to be seen whether or not it will have the desired effect

Overdraft facilities in the spotlight

As the crunch continues more of our clients are complaining about their bank's attitude towards overdrafts. Many businesses are finding that large charges are being levied to renew facilities, whilst applicants looking for a modest increase are not only being turned down but in some cases being asked to repay the overdraft in full.

Stephen Alambritis of the Federation of Small Businesses (FSB) said: “The banks are still not reacting in the way they should be. A lot of small firms rely on their overdrafts to get them through from week to week. Overdrafts are flexible and should be on tap for small businesses, especially during the difficult times when they are getting paid late, and bank managers should be aware of this". At Asset Finance UK we always advise our clients to spread their borrowing and not just rely on their own bank. "Having all your eggs in one basket is a risky strategy," according to Richard King "as you may find that it is your bank manager running your business, not you."

Please see the link below for a full article from the Sunday Times which highlights what our clients have been telling us.

5th reduction since October 2008

The Bank of England base rate is now at an all time low of 1%. It's hard to believe but rates stood at 5% as recently as October 2008.

But are these low rates having the desired effect? In the Asset Finance sector we are not seeing any reduction in the cost of borrowing as the banks are not passing the cuts on. It is also noticeable that a number of high street lenders are going through the notion of lending but not coming up with the funds when it matters. Nigel McKenzie, MD of Asset Finance UK agrees: " As the banks make it harder for businesses to borrow we are seeing an increase in enquiries. At times like these it is crucial to have professional, independant advice. Everyone is talking about the credit crunch but we've completed more deals so far this year than we had done in 2008."

UK Interest rates at 300 year low

The Bank of England has reduced the base rate by 0.5% and it now stands at just 1.5%, the lowest it has been in over 300 years.

Fears of a long and severe recession have prompted the Bank to take this extreme measure, and attention has now turned to see if this latest reduction will be passed on by the lenders.

Bank of England cuts rates again

As expected the Bank of England today cut the UK base rate to 2%. This is the lowest it has been for 57 years and follows the dramatic cut in November.

Asset Finance UK improves it's online services

Our new website has been launched, to provide better information for potential clients, and to keep existing clients up to date with our portfolio during volatile times in the financial markets.

The site includes the facility to make an initial application online, and information about the different areas of specialist lending for both asset finance and cashflow purposes.

This news section will be updated regularly with news, comments and opinions.

Our website was designed and built by Rococo Design & Marketing Ltd.

Two new members with considerable experience

Our business is continuing to expand and demands for finance from our clients remain strong.  We are delighted to announce the latest addition to our team. Adam Knight comes with a wealth of experience having spent his last 12 years with the Bank of Scotland.

This follows the arrival of Richard King in July 2008.  Richard joined us after spells in the City and at one of the UK's leading specialist lenders.  With over 15 years experience in Financial Services he brings valuable experience to the team.