Asset Finance for Construction
Get in touchOur company has been providing funding for those in the construction industry for many years now and has specialist knowledge regarding asset finance.
Construction asset finance can offer a range of benefits to construction companies across the UK by allowing them to have access to new equipment, machinery, and tools without the large expense.
If you are struggling to manage cash flow and the demands of your construction business, then asset finance is a great solution.
Contact us today to learn more about construction finance.
What is Construction Asset Finance?
Construction asset finance is a type of financing solution specifically designed for the construction industry.
It involves borrowing money to purchase or lease the equipment and machinery needed for a construction project, with the assets serving as collateral for the loan.
Instead of opting to purchase tools and equipment outright, you can use options such as finance lease and hire purchase to spread the cost.
These are flexible financing options that are ideal for those within the construction sector, where there is a large demand to purchase new equipment frequently.
Financing this way makes it easier for your construction plant to pay for what is needed, as the cost is spread out.
If you do not have the budget or available cash flow for new machinery, join the many other UK businesses that are relying on forms of asset finance to get what they need.
What Construction Equipment does Asset Finance Cover?
For our construction equipment finance, many tools can be purchased or loaned, including:
Access platforms, cranes, and forklifts
Vehicles
Bulldozers
Crushers and other demolition equipment
Diggers and excavators
Generators
Screeners
Site plant
All of these construction tools are available for hire purchase and other forms of construction financing to make it easier for your business.
Our company offers competitive rates for our services, making it easier for you to access the assets you need to get the job done.
Working with us can fund the machinery and tools you need to get the job done in the construction industry while also protecting your working capital.
Contact the team today to learn more.
What is the Application Process for Construction Finance?
The application process for construction finance typically involves the following steps:
Preparation: Before applying for construction finance, it's important to have a clear understanding of the project and the costs involved, as well as a detailed budget and timeline. You may also need to provide a business plan, tax returns, and other financial statements as part of the application process.
Research: Research the different types of construction finance options available, and compare the terms and conditions offered by different lenders to find the best solution for your needs.
Loan Application: Submit a loan application to your chosen lender, including all of the required financial and business information, as well as any supporting documentation.
Underwriting: The lender will review your application and perform a credit check, as well as an assessment of the financial viability of the project.
Approval: If your application is approved, the lender will provide you with a loan offer, including the terms and conditions of the loan.
Closing: Once you have reviewed and accepted the loan offer, you will need to sign the loan agreement and provide any additional information or documentation required by the lender.
Funding: The lender will then release the funds to you, allowing you to start your construction project.
To receive funding for assets, you need to go through an application process. This is to ensure we can provide the best service for your needs, as well as guarantee that you can meet the repayments.
Our business offers a range of flexible financing solutions that are supported by lenders across the UK economy to ensure we can provide the right option for your needs.
What Types of Asset Finance is Available for the Construction Industry?
There are several types of asset finance available for the construction industry, including:
Hire purchase
Hire Purchase is a financing solution where the borrower hires the equipment or machinery needed for the construction project and has the option to purchase it at the end of the agreement.
Equipment Finance
Equipment Finance is a loan used to finance the purchase of equipment and machinery used in the construction process.
Operating Lease
An Operating Lease is a flexible financing solution where the lender provides the equipment or machinery needed for the construction project and the borrower pays a regular lease payment, with the option to return the equipment at the end of the agreement.
Capital Lease
Capital Lease, also known as finance lease, is a type of lease agreement where the lender (lessor) provides the equipment or assets to the borrower (lessee) for a fixed period of time, with the option for the lessee to purchase the assets at the end of the lease term.
Sale and Leaseback
Sale and Leaseback is a financing solution where the borrower sells an asset, such as equipment or machinery, to the lender and then leases it back for use in the construction process.
What are the Benefits of Construction Financing?
Construction financing offers several benefits, including:
Funding for Large Projects: Construction financing provides the necessary funding for large construction projects that may not be feasible with internal resources or other forms of financing.
Improved Cash Flow: Construction financing allows the borrower to spread the costs of the project over the course of the construction process, improving cash flow and reducing the burden on internal resources.
Tax Benefits: In some cases, the interest paid on construction financing may be tax-deductible, providing additional financial benefits.
Access to Expert Advice: Construction financiers often have expertise in the construction industry and can provide valuable advice and support throughout the construction process.
Flexibility: Construction financing offers a range of flexible options, including various repayment structures, loan terms, and loan amounts, allowing the borrower to find the best financing solution for their needs.
Preservation of Capital: Construction financing allows the borrower to preserve their own capital and use it for other business needs, rather than tying it up in the construction project.
FAQs
Does my Business Qualify?
We can provide funding to almost all businesses, including sole traders, partnerships, limited companies, LLPs, and PLCs.
Is Asset Finance Regulated?
Asset finance in the United Kingdom it is regulated by the Financial Conduct Authority (FCA).
The exact regulations vary by country but asset finance activities are generally subject to oversight by financial regulatory bodies to ensure the protection of consumers and the stability of the financial system.
What are the Disadvantages of Asset Finance?
It is important to note that asset financing is not suitable for all businesses and below are some of the reasons why:
Higher costs: Asset finance typically has higher costs compared to traditional forms of financing, such as loans. This is due to the fact that the lender is taking on more risk by financing an asset rather than just providing a loan.
Limited Financing Options - Asset finance is typically limited to specific types of assets, such as equipment, vehicles, or real estate.
Shorter Repayment Terms: Asset finance agreements typically have shorter repayment terms compared to traditional loans.
How Long can I have Asset Finance?
The length of an asset finance agreement can vary, but typically ranges from 2 to 7 years.
The exact term will depend on several factors, including:
The type of asset being financed.
The lender's risk tolerance.
The borrower's financial condition and repayment capacity.
Some asset finance agreements, such as leases, may have longer terms, while others, such as equipment loans, may have shorter terms.
The borrower and lender will typically negotiate the terms of the agreement, including the length of the financing, to ensure that it meets the needs of both parties.
How Much Asset Finance Could I get?
Asset finance is available for as little as £1,000 or as much as £10 million.
The amount of asset finance that you can get will depend on several factors, including the value of the asset being financed, your credit history and financial standing, and the lender's risk tolerance.
Generally, the amount of asset finance that you can get will be based on the value of the asset being financed, with the lender typically financing up to 80-90% of the asset's value.
What Information is Required for a Construction Asset Finance Application?
The information required for a construction asset finance application can vary depending on the lender and the type of finance agreement, but typically includes the following:
Business Information: The lender will typically require information about the business, including the legal structure, ownership, and history.
Financial Information: The lender will want to see financial information about the business, including recent financial statements, tax returns, and cash flow projections.
Project Information: The lender will need details about the construction project, including the scope, budget, timeline, and any relevant permits or licenses.
Personal Information: If the business is owned by individuals, the lender will typically require personal financial information, such as credit history, income, and assets.
Collateral: The lender may require collateral to secure the finance agreement, such as a lien on the property being developed or a personal guarantee from the business owners.
Summary
We provide alternative financing to construction businesses to make it easier for them to access the equipment they need.
Contact the team today to learn more and see how we can help.