One of the greatest parts about providing alternative finance options for SMEs, is hearing the difference that funding made to their business.
What’s even better, is when they get in touch months down the line, to let you know that their business is going from strength to strength because of the assistance you were able to provide.
We had one such message very recently, from a company Praetura Asset Finance worked with last year, who had found themselves between a rock and a hard place financially. They had an invoice discounting facility in place with their bank, but this had been set up without a full understanding of how their business operated and who their creditors were.
Because of this, money was on the ledger, but the company was not able to draw sufficient funds from it and when the bank started to reduce their exposure on the receivables, the situation got worse. This was putting a stranglehold on the company: it was getting increasingly difficult to operate, they were hitting brick walls when searching for solutions through traditional high street lenders and the future was looking somewhat bleak.
Asset refinance was the answer
In situations such as this, what many business owners don’t consider, is whether something they already have may be able to help.
With asset refinance, you can unlock capital from your business’s equipment, machinery and vehicles (and it’s not an issue if you have finance arrangements already in place for any of these), while continuing to be able to use them.
What you do with that money is your call; if you need the injection of capital to stabilise, consolidate debts or reduce monthly payments, asset refinance can help. Conversely if you need to seize a new business opportunity quickly, expand or restructure, asset refinance can help with this too.
Time and understanding is key
Without fully understanding what a business is, what it does and how it operates, how is it possible to advise on what the best financing options are?
Put simply, it isn’t, which was proved in this case by the invoice discounting facility having been set up incorrectly, because that level of understanding had not been there. This is where the service that an independent asset finance provider (such as Praetura) offers really comes into its own. We will take the time to get to know you and your business, to understand where you are now and where you want to be; then adapt the arrangements to suit those needs.
A challenging case
For this particular client, arranging an asset refinance facility to raise the £300,000 they required, involved reconciling invoice discounting, stock and asset finance facilities with multiple funders, with the added bonus of having just 14 days to do it.
This involved multiple visits with the client, coordinating 11 settlement figures with previous funders and working closely with the company’s accountants, long hours, late calls and the operations, sales and underwriting teams all working together. But that’s what we do!
The facility enabled the business to repay all their existing finance facilities (which also reduced their monthly outgoings) along with a cash injection of £75,000.
This is what the client had to say when they got in touch a couple of weeks ago:
“Many small businesses going through difficult trading conditions can feel pushed towards liquidation,
but they could be saved.
Praetura gave us a lifeline and now business is booming!”
In its simplest form, asset finance is either providing finance for an asset or using assets to provide finance. But it’s more than that for us, it’s about financing solutions to enable businesses to grow.
Asset finance falls into the category of what is commonly referred to as the ‘alternative lending’ sector. And yes, asset finance offers a viable alternative to traditional lending channels. However, the increased levels of flexibility and understanding that we give, means we’re able to offer finance that’s not just an alternative, it’s a solution that is often more appropriate for the businesses we are helping.
For more information about how asset finance could help your business, please get in touch with one of our experts today, by requesting a callback, sending an email or applying for a free no-obligation consultation.