Business assets are the building blocks of long term success
Just like diamonds, the way you structure and purchase assets to grow and run your business is fundamental to its strength and prosperity. Ultimately, this should increase your profitability and your return on equity. Major asset finance is for longer investments with terms from 1-30 years (over the life of the asset).
When an asset purchase isn’t an asset purchase?
What you call an asset may be quite different from what a bank will define as an asset. From a bank’s perspective, an asset purchase is the purchase of a traditional, physical asset for your business such as motor vehicles, equipment, plant and property. The bank is likely to value a traditional asset at the same dollar amount that it will cost you to purchase it, hence you can normally borrow a significant amount of the purchase price.
When would you want asset finance?
Assets are important for every business. You might purchase new assets to improve your efficiency or to grow and expand your business. Generally, you’ll want new assets that increase your profitability and your return on equity.
Return on equity shows how well your business uses money invested in assets to generate earnings.
Types of Property & Asset Finance available:
Major asset finance is used for investments with longer terms from 1-30 years (generally over the life of the asset).
Commercial Property Loan
The nature and manner of lending for commercial property largely depends on the purpose/requirement of the funds and various other factors such as location, the asset itself and the LVR. This can frame the pricing that is available, coupled with the LVR that a lender is prepared to extend against a subject property.
Asset & Equipment Finance
Asset finance allows you to break the cost of your new asset up into smaller, more manageable repayments over the course of its lifetime. Alternatively, you can use this type of finance to rent the asset from the provider, allowing you to upgrade when necessary.
Asset finance is about getting the equipment you need to grow, run and maintain your business without tying up large amounts of your capital and available cash flow.
Standard Bank Loan
A traditional bank loan is secured against real assets (vehicle, house, land, commercial premises, or other business assets). Because the security on this loan acts as a guarantee for the bank, interest rates are lower.