Over the past few years, there seems to have been a shift in the asset finance market. The industry appears to have become more rigid and more focused on the transaction itself, rather than the businesses we are supposed to be helping.
That isn’t to say there’s no place for the transactional approach, of course there is. In many cases, this will be the most efficient use of time. But are we missing a trick if we put too much emphasis on doing things this way, or could a different approach be more of a benefit to SMEs?
Is what the client wants, always what their business needs? Or could taking more time, to better understand their business make a significant difference?
For example, a haulage company wants finance for a new truck, but they also want that finance to be at the cheapest rate, with the smallest deposit, financed over the longest period with a VAT deferral.
The transactional approach would most likely get the finance arranged as requested and end the conversation there. The company got what they wanted, but was it what their business needed?
The flags of the small deposit, the VAT deferral and the long term required could suggest something else. Are there short term cashflow problems? Is the new truck for a new contract? If so, do the running costs (before they start being paid on the new contract) need to be considered?
It would be possible to uncover the answers to these questions if the time was taken to gain a greater understanding of the business.
By looking at the whole picture, it might be discovered that there are another five trucks all running with different finance arrangements taking up a significant chunk of the company’s monthly expenditure. Refinancing existing assets could create additional cash for the new truck deposit and VAT, there could be an additional injection of working capital into the business and payments overall would either be similar or even reduced.
The client wanted finance for a new truck, but a refinance arrangement on multiple assets would be a greater benefit to the business.
Also, without offering this help, advice and expertise, are businesses aware of the range of options available to them? It’s our job as a responsible and pro-active funder to help them utilise these in the best way possible, to help their business develop and grow.
Taking the time to gain a greater understanding allows:
- Funding to be tailored
- Terms to be adapted
- Alternative options to be highlighted
- Future needs as well as immediate requirements to be identified
Bringing the personal touch back to asset finance
This approach is exactly what we offer at Praetura Asset FInance. We are seeing our business go from strength to strength and believe this is down in no small part to the way we operate – client-focused and flexible.
We are not bound by restrictive procedures or set ways of doing things, which allows us to be able to structure deals according to the specific needs of an individual client. Every case is always judged on its individual merits and each deal is underwritten by people, not machines. This is something that the transactional approach to asset finance cannot do.
Here to finance solutions for businesses, not just their assets
We have a responsibility not just to show SMEs the difference that asset finance can make to their business, but the difference that our approach can make; if we rely too much on the transaction itself, we can’t make that difference and the businesses we are here to help are going to miss out on the best solution for their funding needs.
To find out more about the benefits of working in partnership with a consultant lender, please contact the experts at Praetura Asset Finance today by calling 0333 323 7830 or emailing sales@praeturaaf.com
