Make the most of your key assets

Many modern businesses have few traditional tangible assets, such as heavy machinery or large amounts of stock, on their balance sheets now. With the recent boom in the corporate services industry, internet companies popping up on an almost daily basis and improvements in stock regulation and distribution, your businesses’ main tools are going to be computers and telephones.

That said, every business, whether it’s a paper mill, a toy manufacturer, a graphic design company or a carpenter, will have one asset that all too often ignored when it comes to finance options and depending on what industry your business operates in, you may also have some additional capital tied up in equipment that could be used elsewhere in the business.

Here we show you how.

Invoices.
The one asset that most often gets overlooked when a business is looking for ways to improve their cash flow or fund growth is the capital tied up in their outstanding invoices.

A factoring or invoice discounting service, also referred to as invoice finance, effectively buys the debt from you, releasing up to 85% of the total value of the invoices within 48 hours and the balance, less fees, when the invoices are paid by your customers.

The difference between factoring and invoice discounting is the level of service that you receive from the factoring company. A factoring service will manage your sales ledger for you, sending out invoices and collecting payments from debtors but with an invoice discounting service, you are responsible for the debt collection.

There’s also the option of non-recourse factoring which basically means that the risk of your customers failing to pay is covered by the factoring company, not by you.

Compare factoring and invoice discounting quotes online

Office equipment.
Just about every business will have an office somewhere, whether it’s the small bedroom in your house that always got used for boxes, or a 6 story, architectural wonder in the City of London, and if you have an office you may well have computers, fax machines, telephone systems, printers, photocopiers, desks and chairs and so on.

There are a number of companies who will provide the finance for leasing these office systems rather than purchasing them outright, giving you the option of investing that money back into the company. One of the other main benefits of leasing your office systems and technology is that you’ll often be able to negotiate regular upgrades to your equipment as the old technology goes out of date so quickly and the leasing company may well offer some kind of maintenance scheme.

Compare online quotes for asset finance and leasing

If you’re set on purchasing the item outright from new then many suppliers will offer competitive repayment plans, much like hire purchase arrangements, or you may want to take out a business loan to cover the full cost. You’ll have the security of knowing that the asset is yours to keep and you’ll be able to plan your cash flow around the repayments fairly easily. On the other hand, you’ll be responsible for any maintenance work that needs to be carried out and any depreciation will need to be accounted for on your balance sheet.

Compare quotes for business loans

Vans, lorries and company vehicles.
If you use a van, a lorry, a car or any kind of vehicle for your business it’s technically a business asset. There are two things you can do to make sure that you’re getting the most value from this asset; the first is to get a new insurance quote.

Many insurers are now starting to realise the potential of the small business market as the competition in the car insurance market is growing rapidly, and this means that there could be some useful reductions in your premium.

Compare commercial vehicle insurance quotes

The second is to look into hire purchase or a leasing arrangement. When you own the vehicle outright you will always be responsible for the maintenance and as it gets older, the bills will get higher. You’re also going to have to cover any depreciation in its value and, depending on what you use the vehicle for this could cause quite a dent in your balance sheet.

Leasing the vehicle allows you to use it every day without having to make the relatively large initial outlay to purchase it outright. Some leasing companies will even take care of the maintenance and repairs while you’re using it.

Compare online quotes for leasing and hire purchase