Asset Financing & Unlocking Business Opportunities

Asset Finance is an easy way to finance new business assets like vehicles, trucks, plant & equipment, etc.; consolidate existing loans or using a company’s existing balance sheet assets such as fixed assets and accounts receivable to borrow money or obtain a loan. It is often used by businesses to address short-term financial needs like purchasing raw materials or general business expenses, and support business growth. It provides a way to leverage existing assets for immediate cash flow support.

With a new business year getting into full swing, the financial challenges and pressures on businesses, their cashflow and funding continue, as we have seen reported in the media.

With the economic environment expected to present ongoing challenges for businesses throughout the year, if you haven’t already, this would be a great time for you to review your business and its funding structure to ensure you are able to achieve your business goals and anticipate possible cash flow problems well in advance.

There are many strategies that a business can utilise to assist with your cashflow management e.g. reduce costs, increase margins, invoice immediately, shorter customer payment terms, more favourable vendor payment terms, etc. How your business funding is structured can also have an impact on the effective management of your cashflow!

A few points to consider:

-  Do your funding terms match your revenue, debtor and creditor cycles? A mismatch here can result in missed and/or delayed payments which can impact your credit rating and your ability to meet your finance needs in the future.

-  Does your current debt repayment structure have loans with different payment dates throughout the month putting pressure on your cashflow? Restructuring or consolidating of your debt into one facility can minimise pressure on your cashflow.

-   Are your asset loans structured over the useful life of your assets? Paying off your assets too quickly can put pressure on your cashflow. At the same time, paying off your asset too slow can lead to negative equity over the longer term.

-   Do you have capital tied up in unencumbered assets and/or accounts receivable?  Equity in your business assets or outstanding invoices can be released to improve your cashflow and be utilised to generate additional cashflow.

Working smarter in times of distress is important. Streamlining your cashflow is part of that process and all elements of your business impacts it. If you haven't quite got that nailed, give me a call, I'll be glad to provide guidance on how that can be improved.

Adrian Hunt is an Asset Finance Broker with over 30 years’ experience in the finance, banking and leasing industries. He works with businesses to secure tailored finance solutions and minimise their finance costs throughout New Zealand.

Adrian Hunt

Finance HQ

Mob: 021 090 22036

Email: adrian@financehq.co.nz