Asset finance makes good sense for many businesses. Even if you have enough capital, investing your cash in assets leaves you with less working capital to finance operations, or explore new growth opportunities.
The flexibility of asset finance options, with different cash flow and financial implications, can allow you to grow your business faster, generate more profit, or simply make a better purchasing decision for your business.
Start by listing the assets you need in your business to:
"Do the assets you need really have to be brand new or would second-hand suit the purpose?"
Calculate the Return on Investment (ROI)
It’s important to make a case for each asset purchase. Investors and lenders may want to see the evidence, but it also helps you make the right decisions.
Use a Return on Investment Calculator to ensure that the new equipment or asset will indeed make a positive contribution to your business. You can apply it to everything from purchasing a building to buying the latest tablet or computer.
Requiring staff to make a case for asset acquisitions is a useful discipline for those lobbying for new equipment. It can quickly sort out a genuinely productive investment from a vanity item. For example, most employees would like the latest smartphone or a new company vehicle, but would this purchase really add to the business’s bottom line?
Do you need to own it?
Sometimes leasing an asset can make more sense than owning it. For example:
Speak to your accountant or financial advisor about any tax implications before deciding to buy or lease.
Must it be new?
Do the assets you need really have to be brand new or would second-hand suit the purpose? Start-ups especially need to save every dollar to market and grow their business.
Most businesses can save considerably on everything from office furniture to production equipment by:
Taking out a bank loan can be an effective way to finance business equipment purchases that you need, especially if it’s important to you to own the asset from the outset.
The advantage of a loan is that it:
Loans should be structured to match the expected life of the asset: long-term loans for long-lasting assets such as a building and short-term loans for assets with a shorter useful life.
Comerica offers a range of financing solutions, including a Business Line of Credit and Term Loans.
We’ve worked hard to establish ourselves as an SBA preferred lender. Whether you’re looking to expand your business, or purchase equipment or real estate, a Comerica Small Business Administration (SBA) Loan can assist with financing to help your company grow. We will work with you to evaluate your needs and find an SBA Loan for your situation.
Nearly 90% of all businesses are eligible for an SBA loan program. The general qualification standards for SBA lending are less stringent than many other types of loans, but the same issues are considered:
Chatting to your accountant, financial advisor and your bank will help to ensure you get the right asset finance package tailored to your budgets and your business needs.
You can assist your case for asset finance if you come prepared with:
Be prepared also to demonstrate:
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