Asset finance – enabling SME expansion

Asset finance – enabling SME expansion


The reasons why SMEs use asset finance are wide and varied. It can be utilised when necessary upgrades to equipment need to be made, when an injection of working capital is needed, if debts need consolidating and monthly payments reducing or to enable a company to expand and grow.


Funding business growth

There are of course different ways in which funding, through asset finance, can help a business expand; purchasing new equipment to allow new contracts to be fulfilled, to start afresh, or to take a firm in a new direction, are three examples.

Just last month at Praetura Asset Finance, amongst the variety of businesses we helped and the assets we funded or refinanced, were three cases where the funding provided was needed to enable that company to grow (for the three reasons stated above).

New beginnings

The first, was a relatively young forestry company whose growth had been hampered, due to the cost of repairs and downtime caused by sub-standard machinery.

To avoid this cycle continuing, the equipment needed to be replaced with quality machinery (that was under warranty). But that’s a big chunk of cash to find to pay for upfront, especially when the huge amount needed quite simply isn’t there, or isn’t accessible. Hire purchase provided the tool to make this happen; spreading the cost of the machinery over a set period of time.

There were another couple of obstacles to overcome too. Due to the historic trading issues, the company had made a loss in the previous year and if we operated by a tick-box credit scoring mentality when we decided what to fund and when, then the deal would have been declined. This is where being a ‘consultant lender’ can really make a difference. Part of our role is to take the time to understand why certain circumstances have occurred, the measures that have put in place to insure against history repeating itself and what the plans are for the future, before making any decisions.

Talks with company personnel included meetings between the principal investor, the company owner and members of our sales and underwriting teams. It was from these meetings that we could see that the work was there, the reputation of the company was strong, the investor ‘invested’, that organisational changes had been made and that the forestry equipment that we had been asked to fund, was essentially the last piece of the jigsaw to getting the business back on track and realising its full potential.

So that’s what we did! Hire purchase of the forestry equipment costing £200,000 was arranged over a five year term, which they were able to take delivery of and start working with straight-away.

New directions

The second case was a T-shirt printing company who were looking to expand their offering, by adding a more innovative and personalised brand to their business model.

The company was relatively young – which is often a cross in the box for the more traditional lenders. Another cross in the box was the equipment, as it was bespoke, with a US (not UK) based supplier. But taking the time to talk, once again made the difference: time to understand the ways they were wanting to expand and how the equipment would make this happen and by talking with the directors about the difference that this would make to their company’s future.

In this instance, the equipment was going to open up a whole new world of possibilities, but they also needed to invest in stock and the available cash to get and pay for everything upfront wasn’t possible for both. Hire purchase was again the best way to make this possible for this client and funding was approved to the tune of £194,000.

New contracts

A civil-engineering contracting business was the third case. The company had recently had a new multi-million-pound contract awarded to them and needed a specialist heavy duty piece of kit for a specific part of the contract work. There was the added complication of the equipment being sold by a private vendor, based in Europe (once again, another reason for the more traditional lenders to go with a cross instead of a tick).

Without the equipment, there were parts of the contract work they would not be able to do, but to purchase the equipment upfront, they would need releasable capital in the region of £350,000. However, with the deal we put together the cost has been spread over five years, making it much more affordable and without having a big hole punched in their bottom line. The work on the new contract has now begun.

Continued support

We look forward to hearing how these new pieces of equipment help their business grow over the coming months and years, for all three companies. Hopefully we will also be able to assist them with more funding as they continue to expand, or if there are any unexpected circumstances where additional resources are required. This is another advantage of working with a consultant lender: we are on-hand for the full business cycle, not just specific points.

If your business is looking expand, asset finance can help. Whether that’s by acquiring new machines, vehicles or equipment, or if an injection of working capital is needed, to help you take the next step; either by leasing or hire purchase or by releasing cash from the assets your company already owns (both encumbered and unencumbered), with asset refinance.

We are also aware that every business is different, which is why our experts will always take the time to talk with you to find out more about your business, so the deal can be structured according to your specific requirements.


For more information about how asset refinance could help your business, speak to your business finance advisor or local asset finance broker today.


If you want to talk directly to an independent consultant lender to find out more, you are more than welcome to get in touch with our knowledgeable team by calling requesting a callback or emailing





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