Five Tips for Funding Your Equipment
The range and accessibility of SME financing options have gained significant momentum in recent years. With small and medium-sized enterprises now making up half of the entire asset finance market, the team at Maxxia thought you may appreciate some advice when it comes to funding essential equipment for your business. Here’s how to make SME asset finance work for your business …
1. Do your homework
Finding the right SME funding for your requirements will undoubtedly mean you have a lot of research ahead of you. You may be looking for an asset finance company that specialises in offering equipment that your business specifically requires, or you may want to ensure you get guidance from industry experts. Whatever your requirements, it’s important to do your homework and understand your options.
2. Read the small print
Don’t be blindsided by technical jargon that comes your way. Make sure you read the small print before signing anything and ask for further explanation if you’re unsure about the terms – better to be safe than sorry when it comes to the success of your business.
This point applies directly to your responsibilities as a lessee and the terms of your contract. For example, with a hire purchase agreement, you are able to own the asset at the end of the agreed contract while an operating lease means that the asset will be returned to the leasing company at the end of the agreed period. Understanding your options and what you are signing up for is critical to avoid any surprises.
3. Spread costs to match income
As a small business, cash flow is vital. And, particularly if you’re just starting out, you need to carefully balance your outgoings with your income. An SME financing solution could help you do just that. Evidently, buying assets outright means a larger initial outlay of cash and subsequently a higher risk factor. Negotiating a finance solution that spreads the cost of your assets over the time period in which they generate income means that you’re well on your way to balancing your books, and hopefully in a position to invest further in your growing enterprise.
4. Save time and money by outsourcing
Does your business require equipment or assets that will inevitably need maintenance or servicing? In that case, you may want to find an asset finance company that can not only offer you the equipment you need, but the accompanying maintenance services too. Take your local florist delivery service. They’ll need to finance a small fleet of vans to keep up with increasing customer demand, but when it comes to servicing vehicles, organising MOTs, keeping administration up to date, vehicle repairs and accident management – they may need some extra support.
Many asset finance providers will offer SMEs the option of additional services such as these that could save you money and time. Communicate your requirements in detail. That way, you know you’ve left your leased equipment in the best possible hands throughout the period of the lease.
5. Don’t settle
Find SME financing experts that understand your business needs. If you contact an asset finance company that is pushing to sign up, and they do not consider your company’s inner workings and what you require, you might be better off going elsewhere. Build a rapport with the right provider. Once you’ve found an asset finance company that understands your requirements and can offer you the time and advice you require, you’re much more likely to find SME finance solutions that fit in with your future business plans.
Get it right first time with our team of asset finance experts at Maxxia. We provide SME finance solutions nationwide for a variety of businesses that require a range of equipment, from vehicles to computers, agricultural machinery, and more.
Contact us today to find out how we could help you with equipment funding and SME business advice.