As a business you are likely to own assets. Assets can come in a variety of forms, it could be equipment that you use, it could be vehicles that relate to your business and it could even be property that you use to run your business from.
All of these assets have a price applied to them, a value that can be assigned to them, which is where the idea of asset refinance comes from.
What is asset refinancing and how does it work?
From time to time some businesses need to borrow money in order to grow.
There are a variety of different funding options that are out there to consider and the one that you go for will really depend on how much money that you need, as well as your particular industry or business.
Secured business finance is one of the most common approaches to take, whilst it may mean that you need to offer something of value as a form of security (such as property or equipment) often you will see lower interest rates or even be able to borrow more money than if you take out an unsecured loan type.
Asset refinancing is one form of secured lending that uses any assets that you may have within your business.
In order to borrow funds, the lender will look at the asset that you are offering as security, they will check how much it is worth and how it can be used.
Once the value is decided, you will be given an advance of money based on a % of this amount. The asset in question will then be financed by the lender, although you will still keep it and you will be able to use it.
You will be required to make payments over time, with interest applied and once the amount that has been borrowed is paid back in full, the ownership of the asset will be transferred back to your business.
Is asset refinancing a good option?
It makes sense that asset refinancing is a good option for a business to consider.
Many businesses will have assets that they can use to secure their borrowing, and as with any secured loan, the interest rates are may be lower than a loan which is unsecured.
It is a great option for businesses that are asset rich and need to release equity for cashflow purposes or business expansion.
For asset refinancing contact us
Contact The Funding Store today for a quick quote or to discuss more about how asset refinancing could work for your business.
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This article has been produced by The Funding Store for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of the information contained in this article is accepted by The Funding Store (MK) Limited. In all cases appropriate professional advice should be sought before making a decision.