Posted: Monday, 11 November 2024 @ 10:15
When it comes to asset finance, some funders focus on hard assets including large pieces of machinery or agricultural equipment, while others focus on soft assets such as furniture, software, IT equipment, and electronics. What's unusual is finding someone who will do both.
Soft asset finance
Soft assets in themselves can be more of a challenge for businesses to find funding for, despite being instrumental for running a business. However, for businesses looking to thrive and grow, lots of soft assets present a sizeable upfront cost that can take a long time to save for, preventing you from getting on with business development, or alternatively disrupting cash flow if you don't have a funding solution in place.
For example, a commercial coffee machine might cost anywhere between £2,000 and £5,000, which is a big outlay for an SME, especially as it hasn’t actually made any coffee at that point. The right funding solution allows you to treat the coffee machine almost like a robotic employee, paid in arrears as it works for you, and making a profit as you balance the cost of coffee and its overall value to your business against your repayments.
Tricky assets
There are also some assets that funders are more wary of than others, making them harder to finance. For example, air conditioning units can be contentious if the lender doesn't have the capacity to think outside the box. For example, they could look at additional security, utilising different funding options such as short-term business loans, or working in tandem with another specialist lender.
A non-industry specific lender
As an independently run SME ourselves, Rivers was established to meet the needs of other business owners and their enterprises, understanding that more often than not, the hard facts of the situation are just one part of the story. It's for that reason that while we primarily focus on soft assets, we are also prepared to consider finance for some hard assets too, and we are also open to thinking dynamically to help make funding work for strong candidates.
In particular, the spa and salon sector has always been important to us as, and we have a reputation for supporting the industry when it comes to both asset finance and business loans. We are also partial to working with businesses on IT equipment and will consider a wide range of other assets.
The combination of being a non-industry specific lender, as well as being open to both soft and hard assets, has made us unique as a funder, but has also meant clients are able to come back to us time and again, knowing we will support them wherever we can, always giving them a prompt answer either way.
Unique funding success stories
As an example of our dynamic approach, the variety of clients, assets, and circumstances we have been able to support, here are some of our funding success stories:
Finance for multifaceted marine business
The Marine Group, a fully owned subsidiary of COS Investments Sàrl, is a multifaceted marine business spanning marina equity investments, harbour management, dredging, consulting, acquisitions, waterside properties and a host of other services. After a period of difficulty resulting from the pandemic and the demise of banking partners, the company was able to restructure and get back on track, but they required different levels of funding to have the right working capital to roll out effectively.
Having been introduced by Halo Corporate Finance, Rivers arranged seed capital to complete the restructuring process. This was followed by a working capital loan for their marine services arm at Cardiff Marine Village. The final piece of the puzzle was asset finance for the acquisition of new dredging equipment, which we arranged in partnership with another specialist lender because of the unique nature of the assets.
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Helping a high street salon grow to the next level
In a different space entirely, a client with a profitable salon business came to us wanting to borrow funds to buy two new pieces of equipment that would help grow. While they had the financial resources to fund the purchase themselves, they preferred to borrow it as part of a sensible and measured approach to cash flow. They were looking to purchase £81,750 of salon equipment, for which we financed £73,575 over a five-year term.
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If you are a broker or business and would like to find out more about how we work, contact us any time.