While the country emerges from some elements of lockdown restrictions and the vaccination roll-out continues at pace, the wheels of business for SMEs across the UK continue to turn; some slightly slower, some in a different way and others in a new direction.
A huge number of these businesses, because of the unprecedented circumstances of the last 12 months, are operating with reduced or restricted cash reserves, but need funding assistance to be able to keep moving forward.
Many have been boosted through access to Government-backed schemes. According to data from the British Business Bank, businesses across the UK have benefitted from 1,531,095 Bounce Back Loans worth £46.5 billion and 98,344 loans worth £23.3 billion through the Coronavirus Business Interruption Scheme (CBILS). This has helped many SMEs keep their heads above water, paid for new Covid-secure measures to be put in place and enabled bills to continue to be paid.
But we’ve now reached the time when money for the interest-payments of these facilities will need to be found, with many of the first payments due this month – whilst businesses still need to continue to adapt, develop and grow, which is not possible without the funds available to invest.
The funding schemes made available by the Government in 2020, as well as providing vital resources, also opened the doors to the range of business funding options available to a much wider audience. In 2021 there are a raft of companies that have previously not wanted or needed to utilise these, who now have a greater knowledge of the many benefits that funding solutions such as asset and invoice finance can offer, especially when conserving cashflow is an essential requirement.
Looking at asset finance in particular: hire purchase and lease facilities can allow companies to invest in new or upgrade existing equipment, without having to find the funds to pay for the purchase outright. Instead manageable monthly payments can be tailored to the specific needs of your business, flexible deposit options and seasonal payment plans are available and there are tax benefits too, including (for hire purchase agreements), the super-deduction tax announced by the Chancellor in March’s budget.
Asset refinance is becoming an increasingly popular funding tool, allowing SMEs to create working capital, conserve cashflow and consolidate existing debts. The beauty of this funding solution is that you’re unlocking capital from the assets your company already has, whether these be vehicles, machinery or equipment (without diminishing their usability).
The range of situations where asset refinance funding can assist is wide and varied and there are many examples of this from the refinance relief funding that Praetura Asset Finance has provided just this month, including:
a transport and logistics company needing to boost their cashflow reserves, following their business being severely impacted by port closures back in December and post-Brexit legislative changes. Praetura consolidated their existing hire purchase agreements (with both Praetura and other funders) and through the refinance of 68 trucks and trailers provided a £355,527 refinance relief funding facility which gave the business an immediate cash injection of £100,000 and a reduction in their monthly payments of over £18,000 per month.
Another client was a crane business undergoing a restructuring process, looking to invest in new equipment but with limited cash reserves. Through the refinance of a Bocker truck mounted crane the business owned, £50,000 was released which provided the company with the capital required to pay the deposit for a new asset, which would offer a more flexible and cost-effective alternative for the business.
We also assisted a car and van hire company looking to support the growth of the business by raising funds to expand the fleet of vehicles they had available to hire, without wanting to dramatically impact their cashflow levels. Praetura Asset Finance arranged the refinance of Range Rover Vogue the company owned, providing a working capital injection of £40,000 (the proposal was accepted on the same day it was received and the funds were in the client’s bank account within the week).
If companies have balloon payments falling due, these can be refinanced too. Just last week Praetura refinanced the balloon payments of 22 vehicles for a commercial vehicle contract hire company with a refinance facility totalling £837,240.
An exclusive added bonus of Praetura Asset Finance’s refinance relief funding is that we are also currently offering the option of up to nine months interest-only payments, to further assist cashflow reserves in the short term*.
Our team of experts are here to help
At Praetura Asset Finance, we are proud of the reputation we have built over the years, especially for our expertise in structuring refinance facilities to the specific needs of each individual business. We work in partnership with a wide range of asset finance brokers, commercial finance brokers and business finance advisers throughout the UK.
Praetura Asset Finance are a patron of the National Association of Commercial Finance Brokers (NACFB), who are an accredited trade body representing over 1,900 commercial finance brokers in England, Wales, Scotland and Northern Ireland. A list of member brokers can be found on their website: findsmefinance.co.uk.
To speak directly to a consultant lender who specialises in asset refinance and find out more about our new exclusive refinance relief funding, you are more than welcome to get in touch with the team at Praetura Asset Finance by calling 0333 323 7830 or emailing firstname.lastname@example.org.
*Terms and conditions apply. The number of months interest-only payments offered will be dependent on the loan to value percentage of the equity in the assets being refinanced. Please speak to a member of the Praetura Asset Finance team to find out more.