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Asset Finance

The new year is upon us! For many business owners, the first few weeks of 2019 will be a time for reflecting on the year that was and planning for the future.

What does 2019 have in store for you? I think for a lot of businesses owners the answer will revolve around growth. Current economic conditions are leaning quite strongly in favour of economic growth, with the Reserve Bank deciding to keep the Official Cash Rate at 1.75 percent – a historic low that is expected to remain unchanged through 2019 and into 2020. Attractive interest rates on loans, combined with exceptionally low unemployment rates, suggest that many companies will be looking to expand their operations in the near future.

Of course, growing a business involves significant capital investment – particularly if scaling up requires purchasing expensive plant, machinery or commercial vehicles. Covering these costs by dipping into company coffers can put undue stress on cash flow, while using existing assets as collateral limits other potential lines of credit.

The good news is there are other options! Asset finance offers an effective alternative to conventional business loans, and can provide companies of all sizes with the resources they need to grow.


Is asset finance right for you?

Asset finance is a type of lending that gives you the money you need to buy business assets and grow your company. Unlike a regular loan, which typically uses existing business infrastructure as collateral, asset finance is usually secured by the asset you purchase. This allows you to acquire business assets without spending existing capital.

Who is best suited to asset finance? In my experience, a wide range of companies can benefit from this type of loan product. Companies that rely on expensive equipment are good candidates, as it gives them access to the assets they need without bottlenecking cash flow. It’s also a good option for companies that experience seasonal income variability, as the terms of asset finance are often more flexible than those associated with traditional loans.


What are the benefits of asset finance?

The most obvious benefit of asset finance is that it allows you to maintain good cash flow. Being able to buy new assets without using existing company capital enables you to maintain a high level of liquidity and ensure that you have the funds necessary to run other areas of the business.

The second key advantage of asset finance is that it uses the asset your purchase as security. This means other business assets can be used for collateral should you need additional loans in the months and years ahead.


Talk to us for your asset finance needs

If you’re looking for ways to grow your business, we’d love to hear from you. Here at Penberthy, we’re proud to offer a great range of flexible asset finance options that can provide your company with the resources and assets it needs to thrive. For more information, give us a call on (09) 486 1175 and have a chat to us about asset finance.


Talk to Mark about your asset finance needs.