Asset finance in a post lockdown world

Now that we are once again able to do so, it’s been great for Team Azule to get back to meeting up with clients old & new in person, and even catch up over a beverage!

After the awkward hug / handshake / elbow bump & discussing Tiger King we tend to get asked the same business question: ‘How difficult & expensive is it out there these days when looking to arrange asset finance?’

To answer this question, here is a rough guide of what to expect when you are ready to take the plunge on applying for finance for your equipment.

How did your business fare during the pandemic?

The first thing to bear in mind is the dreaded C word. Lenders are very keen on wanting to know what you did during the Covid-19 pandemic. Were you able to open/work & at what capacity? If so, did you pivot into a new market or were you able to operate as you were (albeit form your kitchen table?). If eligible, did you take on any Government schemes such as BBL, CBILS or any grants?

How is business now?

Following on from this, how are things now? What do you have coming up? Be prepared to be asked for management accounts to evidence this, so lenders can see a snapshot of where you are now & also a cashflow forecast to see where you expect to be in the near future. This will give them that added confidence & allow for a fairer assessment.

Eligibility for the Recovery Loan Scheme

The market does seem to have its appetite back despite the end of the CBILS scheme. Businesses are now able to apply to use the Recovery Loan Scheme until the end of June 2022. This scheme provides the lenders with a government guarantee for up to 80% of the borrowing should they wish to utilise it. The only thing to bear in mind is each different bank must apply its own internal structure on top of this so offers may vary depending on where you go. Full details of the scheme can be found here: Recovery Loan Scheme – GOV.UK (www.gov.uk)

Additional security may be required

Please bear in mind that where lenders are not utilising the Recovery Loan Scheme, guarantees and indemnities might be required.

Decision Times

An important thing to bear in mind is that the application process is taking longer than usual. This could be due to a variety of reasons. For example, a lot of people are still working from home so instead of being able to pop across the office to see a colleague, lenders are having to rely on responses from colleagues electronically which can slow the process down. Applications are also being looked at in a lot more detail.

Equipment Lead times

Finally lead times on certain equipment are at a record length! Something that would usually be available on the shelf now have lead times well into next year. Most approvals from lenders are valid for  30-90 days so it is definitely worth double checking with your chosen suppliers beforehand to avoid approvals  expiring, then  having to go through the application process all over again in a few months.

If you would like to discuss your equipment plans and options on asset finance, we would be delighted to speak to you!

Please drop us an email at info@azule.co.uk or give us a call on 0207 042 2630

By: Kelly Sherlock-Flowers

By |2021-11-24T16:38:41+00:00November 24th, 2021|Categories: Blog|Tags: , , |