For businesses that are aggressively investing it's essential that the money they’re spending returns a profit in a given period. The best way to ensure high business productivity is by having the smartest, most cutting-edge assets working hard for your business.
When Upgrading Assets There Are Two Key Terms You Need To Have In Your Pocket...
Soft Asset - in short, if you can’t physically touch it, then it's a soft asset. Think new software for a bunch of computers, a new CRM system to organise your leads or new Skills for your businesses Alexa.
Hard Asset - anything with wheels or you can physically touch - coffee machines, tractors, desktops… you get the idea.
However, businesses can be afraid to upgrade assets for fear of huge initial costs and the risks of a disruptive installation process.
One solution is asset finance.
Why Use Asset Finance?
Access To The Newest Equipment
The most obvious advantage of asset finance is that business can access equipment that they may not have been able to afford had they not chosen to use finance. Accessing this equipment will give your business the leg up that your competitors might not have, you’re able to offer a service that's way above what you’d expect from a small business. New equipment gives you leverage. Other important benefits to consider is the increased efficiency and productivity that a brand new asset can give you, each pound spent on new equipment is a pound better spent than on an asset that's 3 years it's senior.
Banks are still feeling the jitters from the recent(ish) economic collapse of 2008 which has meant they’re reluctant to lend has increased, it only takes one minor flaw in a businesses history for a bank to say no dice. Approaching an asset finance business such as Love Finance allows for more flexibility as lending criteria are slightly leaner, mainly because each business is judged on its own merits, as opposed to a strict one size fits all checklist.
Greatly Improved Cash Flow
As we go on about, again and again, asset finance improves your cash flow because there is no giant initial cost for you to worry about, spreading a large cost over a period of 2-5 years allows business to breathe a sigh of relief knowing they afford cheap monthly payments and that they’re always going to have the best equipment for their business.
Asset Finance Companies Understand Your Business
Banks, as a general rule, don't have a strict set of industries that they lend to, therefore their lack of knowledge in say, the coffee industry, may lead to companies taking out finance packages that don't suit them. Working a with an asset company offers greater specialist knowledge as most asset finance companies operate within a set amount of industries - for instance, at Love Finance we specialise in garage, fintech and software finance. By being niche assets companies can go deep into the weeds of finance in a particular industry. When you compare this to alternative lending solutions such as P2P and crowdfunding, where the funders barely understand the business they are funding or the industry as a whole, it makes complete sense to use asset finance firms.
Upgrade Your Assets To Upgrade Your Productivity
Regardless of the asset set-up you’ve got, the bottom line is this… they will need to be upgraded at some point, otherwise, you’re sitting on an asset that's out of date and not making you the amount of money it could be making. The effect of an unproductive asset doesn’t stop there, it can spread to other parts of your business, clogging up your production line by affecting a certain bit or section of a process, or outdated kit demotivating your staff. We’ve all been there, when a piece of machinery, office equipment or software isn't working to its full potential we get fed up, check our phones, make a cuppa tea, waste time essentially.
The link between productivity and asset upgrade isn’t just hyperbole… 31% of manufacturers in the State of the Manufacturing Nation Report 2016 said that investment in new equipment had a positive impact on productivity. Productivity also matters if you’re a business that's had a period of expansion and is looking to diversify into new areas, if you can't access high-quality assets that can get you into new markets - it's the difference between success and failure.