Asset funding at six year high
The Finance & Leasing Association has recently reported that the volumes of assets being financed in the UK is at a six year high; in addition asset finance is recognised by the British Business Bank as being a key solution for UK SME business lending.
Despite the increasing popularity of asset funding, it can be a confusing topic for businesses that haven’t used it before – for example the types of finance available and getting decent advice about which funding options best suit a given set of circumstances.
In our own survey, 77.19% of respondents stated that they expected to see their businesses grow over the next year but that 32% had never utilised asset funding before. Almost a further 20% reported that they had tried asset funding but had a poor experience.
Searching & selecting
In seeking funding, and in a typical procurement style, our clients report that they approach a number of potential funders for any given project; quotes are acquired, compared and a decision is made which provider to select.
The fact is that the process of shopping around takes time and effort and can be frustrating when different providers offer different product variations and terms that make like for like comparisons a headache.
An option is outsourcing the search and evaluation element of the task, brokers are commonly used to do this kind of legwork.
But broker utilisation often results in funding through a variety of funders over time – each one with its own terms and conditions, payment dates and statement treatments. Brokers also tend to be hands-off once an agreement is made between a funder and a client. For a finance manager, reporting across a range of providers is not necessarily straightforward and a broker typically can’t add value here.
Many organisations will take the easy option to fund their assets through their bank but this approach doesn’t ensure the most competitive rates or the broadest range of asset funding products. To compound the challenges, banks still aren’t as forthcoming with funding as their clients might expect and trust in the banking sector has been eroded in recent years. Other organisations are concerned that taking asset funding from their bank will restrict their ability to secure funding in other key areas.
If searching for, selecting and managing asset finance is integral to your role, you’ll know all this already.
Perhaps the ideal solution is an arrangement where the administrative burden of shopping around is outsourced; the broadest range of financing options is available; best value for money is always obtained and detailed procurement audit trails are available to prove it; reporting is standardised and invoicing is consolidated.
Did you know that the nirvana of maximised benefits and minimised downsides is more real-worldly than you might expect? Read on if you are intrigued and would like to know more.
The Maxxia alternative
Maxxia is an established asset funder but rather than focus solely on funding transactions, we have proved that we can also add significant additional value to our clients through the consultative and administrative services we provide.
In order to find the best funding solution for a client, we have devised a proposition that allows us to take a funding brief and then go to market to search for the best solution rather than just offer the financing we can provide ourselves.
Maxxia provides asset funding directly but it also acts as an introducer to a panel of other funders as well.
With fluctuating credit availability, cost of money and activity targets, all lenders will have terms that vary and panel funding is advantageous because the introduction of what is effectively competitive tendering for each and every asset funding requirement means that you can be assured of the best value for money.
As our clients already know we operate in a completely open fashion; the advantage of working with Maxxia as a funding management business is that all transactions can be recorded, reported and subject to audit in a consistent fashion regardless of where the ultimate funding is coming from. A client gets the administrative benefits of dealing with one key partner whilst enjoying the financial benefits of working with many – we think this equates to having the best of both worlds.
“We have dealt with many funders and brokers over the years. Tony understood both our business and our requirements, he liaised with our suppliers to ensure the solution was successfully delivered and the process was open and transparent throughout. Above all, a fair and competitive rate was provided” Adam Brown, CPG Logisitics Limited
The value for Maxxia in going further and doing more is some market differentiation and relationships with our clients that are deeper, longer-term and more strategic. And in offering panel funding, we can justifiably claim to be a one stop shop for asset funding.
“Without the help of Maxxia, the school would have been £48,000 out of pocket.…Maxxia was not looking to gain anything out of it; it just formed part of their transparent and honest approach” John Wiffen, The Green School
If saving time and money through outsourced processes appeals to you, please get in touch and we can discuss how panel funding could add value to your organisation.