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Unlocking cash from assets

If your business is facing cash flow problems, the answer may not lie in borrowing more money. The solution could be releasing the money currently tied up in business assets.

Using your assets as a way of boosting working capital is known as asset based finance. It’s been around for a long time, but with overdrafts and loans becoming harder to get hold of, asset based finance is receiving more attention.

The advantages of using existing property as a source of extra cash are:

– You take on no additional debt.

– The security for the finance already exists, in the asset itself.

– You get double the benefit, having use of an asset and also getting access to its value in cash.

– It can be very flexible, linking directly to your level of business.

Below are some of the most common examples of asset based finance.

For a no-obligation quote of how much cash your business could unlock from its assets, give the Business Recovery specialists a call now on 01451 832533.

Sale and leaseback

Selling your business assets with a view to leasing them back for an agreed period can be a sound, strategic move. If your business needs cash now, ownership is probably a hindrance to growth, and perhaps even to survival.

A well-structured sale and leaseback deal can unlock the capital tied up in property, plant and machinery or vehicles. You can fund the continued use of the asset out of future profits, while getting an immediate cash flow boost now.

Global corporations have long understood the value of cash over assets, choosing sale and leaseback to fund acquisition and expansion.

Invoice factoring

If your customers are taking 60 to 90 days to pay, up to a quarter of your annual turnover could be locked away as unpaid debt in your sales ledger. That’s a huge amount of cash which you could be using more profitably in the business.

Invoice factoring can release a substantial amount of that money, while at the same time cutting your operating costs by taking over credit control activities.

Factoring is used by firms at all stages in their lifecycle, including right at the beginning of the start-up phase. It can be an extremely effective method of increasing the available working capital without taking on debt.

Invoice discounting

For longer established businesses wanting to release cash from unpaid sales, invoice discounting offers a flexible solution. You can choose to operate an agreement confidentially, meaning your customers are unaware of it.

Invoice discounting and factoring are available for both domestic and international trade. It is also possible to protect yourself from non-payment by customers, through credit insurance.

Commercial mortgage

If you own property which you do not want to sell and leaseback, another way to use it as a source of capital is to take out a commercial mortgage.

This is simply a loan secured on the property, meaning that no additional security is required. If your business is asset rich but cash poor, this could be the answer to your cash flow problems.

Unlock your potential with Business Recovery

Our commercial finance experts have supported hundreds of firms through the process of finding solutions to their cash flow difficulties. They will work with you to develop a tailored solution that meets your particular needs.

Calling our specialist team will cost you nothing. Ring us now on 01451 832533 to discover how much cash you could unlock from your assets.