With over 30 years' experience in arranging finance deals for people in the creative industries, we know that your livelihoods, or your shareholders’ returns, depend on how quickly you can provide what your clients, or your businesses, need – often immediately. At the same time, you need to make level-headed, sensible decisions that do not jeopardise your future.
Everything we do is above board; we do not offer dodgy deals, knowing that the success of our business depends on providing you with a professional service that does not put you or your business at risk.
But what sort of deal would be best? How much can you afford? What are the implications? And how on earth can you decide when number crunching is not your skill or part of your job? We will guide you through the options, advising you on what would be best for you.
- Hire Purchase (HP): The most common contract used in finance today. You pay in instalments over an agreed period; at the end of the agreement the equipment passes to you if you wish, on payment of a nominal option-to-purchase fee. It is shown in your accounts as an asset purchase; interest is charged through profit and loss.
- Finance Lease: This is a rental agreement; you will never own the equipment. You pay in instalments over an agreed period after which you can rent the equipment (at a reduced rate), sell the equipment on behalf of the leasing company (keeping an agreed proportion of the proceeds) or return the equipment to the leasing company. There are no longer any tax advantages from this option so it is no longer cheaper than HP but, as payments are shown in your accounts on the balance sheet, it has other advantages.
- Operating Lease: Also a rental agreement, this does carry tax advantages. The leasing company underwrites a small percentage of the capital cost while you pay the rest in instalments; those payments are shown off balance which is a distinct advantage for quoted companies and local authorities. It could be ideal for companies seeking to use equipment for, say, two years after which they might wish to upgrade it.
- Re-finance (sale and lease back): Many companies have balance sheets that are full of unencumbered assets, including equipment they have bought outright. Cash flow might be tight (for example if you have won a new contract and need to invest in staff and other costs before you can invoice your customer; or if your business slows and there is a delay before it picks up again). Meanwhile, you have plenty of assets. A carefully selected and managed re-finance scheme can help companies get cash out of their balance sheets, improving cash flow management without having to resort to lenders of last resort.
- Rent to Buy: This option gives you the chance to take out a short-term rental contract on equipment (either to test the equipment or see how you like rental contracts). You can then either return the equipment, continue hiring it (at a lower rate) or convert it into a purchase at a later date, with your rental payments counting towards the purchase price. Dependent on a careful selection of assets, and geared to very specific needs, these contracts are always bespoke and can offer huge flexibility. We believe we are the only finance company that will enter into rent to buy agreements.
- Project finance, venture capital, sale of companies, export finance, market information, partnerships, stock exchange listings, private equity purchases: Through a team of advisers with whom we work, we can provide information and advice on these and other aspects of business finance. Unlike most finance companies, we have a much wider range of resources from which we can find the right solution for you, whatever direction you want for your business.
If you would like more information before deciding what would be best for you, or if you are certain of what you want, do contact us