The world of business is full of myths and misconceptions and refinancing is a prime example.
While, in reality, it can provide a flexible approach to releasing some of the value in your business, often the perception is that refinancing is just there as a last resort if your business needs cash quickly.
Certainly, refinance can be used as a solution for companies that are asset heavy but cash poor…yet that’s not the only way it can be used. Unfortunately, lack of understanding is preventing many companies from taking advantage of the opportunity refinance can offer to invest and grow.
The flexibility of refinance has been leveraged successfully by one of our customers recently when the company wanted to invest in a refurbishment programme for its manufacturing equipment.
By investing £60,000 in upgrading the equipment, our client not only improved its manufacturing capabilities but also increased the value of the assets. It was then able to refinance the equipment to release the capital it had invested, helping the company to capitalise on its business growth potential.
This example demonstrates how flexible refinance can be and how it can be used strategically to provide a cash neutral approach to business improvement.
While many companies would see refinance as a way of releasing capital before the equipment investment, by waiting until the machinery had been upgraded, this client was able to release more from the assets.
Of course, the needs of every business are different but the key point here is to look at refinance from a strategic point of view rather than treating it as a distress purchase.
At Praetura Asset Finance, flexibility and tailored solutions lie at the heart of our approach so, before you borrow, it’s always worthwhile discussing all the alternative options.
For more information on how asset finance can help you, call us today on 0333 323 7800.