With restrictions on loans against properties, finance is often raised on other assets owned
by a business. Asset descriptions are set out on accounting balance sheets.
Fixed assets usually comprise of buildings, fixtures and fittings, plant and machinery
and motor vehicles. Asset finance such as HP, Lease, Sale and Lease Back or Contract
Hire can be arranged on plant, machinery and motor vehicles.
Current Assets comprise of cash held, stock, debtors (money owed to the client)
and pre-payments.
Finance can be arranged against stock, though not normally on a standalone basis
and usually against a percentage of total end value of between 20% and 50% of finished
goods (more if the stock is high value) as long as the stock is non-perishable.
Invoice finance or receivables funding (Invoice Discounting and Factoring) can be
raised against invoices issued for goods and services sold by the client, pending
receipt of payment(s) from the client's customers. Up to 80% of the invoice value
can usually be raised.
Rates, terms and fee structure will depend on the client's financial position and
the asset(s) to be financed.
Lenders will typically expect to see 2-3 years trading accounts, 3-6 months
business bank statements, a detailed asset description and a schedule of debtors, creditors
and stock for your client.