May 2014 - Page 2 of 2

Why Has My Equipment Leasing Company Turned Me Down For Credit?

May 9, 2014/1 Comment/in General/by Jess Wells-Flint

If you are an SME or start up business that needs to find smart ways of financing your business plans, you may well be hoping to set up a lease agreement to fund the acquisition of essential equipment. Or perhaps leasing to fit out your office or upgrade your IT systems.

So what can you do if you find out you have been turned down for leasing by a particular leasing company?

The first thing to do is find out why. Leasing companies are under no obligation to provide an explanation as to why a leasing application has been refused, and they made refuse to do so for commercial reasons. Reasons why include:

They are fully committed, i.e. they have some leases with you already and do not want to extend the facility
You have missed some payments with them
You have not been trading long enough
Your accounts are showing a downward trend
Poor liquidity on your accounts
Accounts not filed on time
They do not ‘like’ the sector – retail, construction and recruitment companies inparticular suffered due to this in the recent recession
They do not ‘like’ the equipment – photocopiers, telecommunication equipment or construction equipment
The supplier is not strong enough
Your credit rating is poor
You have bankrupt companies against your name
Your location
The amount to be financed is too high compared to the company balance sheet
And many more reasons…

Next steps if turned down for credit by a leasing company

Sometimes, if you have been turned down for credit, you can appeal the decision and/or provide more information. More often than not, the finance company will stick to its original decision: while a Credit Manager does not get fired for rejecting your credit application, he or she may get in trouble for an acceptance that goes wrong!

Try, however, to find out what the key reason(s) are. They may be simple to fix. For example, if the finance company is fully committed you can simply approach another leasing company. If the leasing company does not like your chosen supplier, you can, of course, change the supplier. Should your accounts show a downward trend it may be that you can offer management accounts and bank statements that indicate a recent improvement? If you have not been trading long enough, are you in a position to offer a personal guarantee, or maybe provide a larger deposit?

It is always better to provide as much data as you can. Credit analysts have to look through many deals every day and they tend to make decisions quickly, especially where there is limited information. A well written proposal will make your credit application stand out.

This is where your leasing broker comes in. A good leasing company can package up information in a way that the funder finds most acceptable. Where the job of finding a credit facility falls on the shoulders of the supplier, especially in sectors such as photocopiers, you may find that they do not have the technical expertise to package a lease deal up and send it to a leasing company.

So in summary, if you find yourself turned down for leasing…

If possible, find out why you have been declined
Provide as much positive information as you can
Change your proposal to make it more interesting
Contact another leasing company

For more information about obtaining a leasing deal please contact WestWon on Tel: 01494 611 456. Alternatively, you can download our free Guide To Leasing.

2014 Changes To The Annual Investment Allowance For Capital Equipment Could Benefit Your Business

May 6, 2014/0 Comments/in Blog, Catering, Catering Equipment Leasing For Business, Construction & Engineering Equipment Leasing For Business, General, IT Equipment Leasing For Business, Processing Equipment & Packaging Machinery For Business, Scientific & Medical Equipment Leasing For Business, Waste, Waste Equipment & Recycling Machinery Leasing For Business/by Jess Wells-Flint

In recent times business owners have sometimes tended to put investment in plant and machinery on the back burner because of economic instability.

It is in response to this that the Chancellor announced in the March 2014 Budget that there would be a temporary increase in the AIA limit will from £250,000 to £500,000 per annum with effect from 1 April 2014 for companies and from 6 April 2014 for sole traders/partnerships.

Window of opportunity for businesses to acquire capital equipment

The objective behind this initiative is to enable more businesses to undertake capital investment with a significantly reduced level of financial exposure.

However, although no announcement has yet been made, it is expected that the AIA limit will revert to £25,000 per annum with effect from 1 January 2016. It may therefore be important that businesses planning to invest in the near future do so before 2016 whilst the higher temporary increase in the AIA limit is in place.

Benefit of AIA for business

A key advantage of AIA is that it accelerates the timing of tax relief on qualifying capital expenditure. Depending on the timing of the investment, the temporary increase in AIA means that businesses may be able to bring forward the tax relief on more of their capital expenditure. However it is worth businesses considering advancing or deferring investments in order to maximise their AIA over the period it is available.

More about AIA

The AIA was first introduced in April 2008, providing 100% allowance on the first £50,000 investment in qualifying capital expenditure. The maximum allowance was doubled to £100,000 for qualifying expenditure incurred from 1 April 2010 (6 April 2010 for unincorporated businesses), and was reduced to £25,000 with effect from 1 April 2012 (06 April 2012 for unincorporated businesses). In the Chancellor’s 5 December 2012 Autumn Statement the AIA limit was temporarily increased from £25,000 to £250,000 for a two-year period from 1 January 2013 to 31 December 2014, before being temporarily raised to £500,000 in the recent budget.

Qualifying expenditure covers most assets purchased for use by businesses

• Office furniture and equipment

• Vans, lorries and equipment

• Building fixtures e.g. shop fittings, kitchen or bathroom fittings

• Business machines e.g. printing press,lathes, tooling machines

• Tractors, combine harvesters and other agricultural machinery

• Gaming machines, amusement rides

• Computer hardware and qualifying software

• Computerised/computer aided machinery including robotic machines

• Wind turbines and fibre optic cabling

• Driving school cars (adapted with dual control mechanisms)

The following items of capital expenditure do not qualify.

• Land, buildings or cars

• Expenditure incurred in the accounting period when trade ceased permanently

• Existing plant and machinery

• Plant and machinery that was gifted

• Plant and machinery used by a person for leasing under a long funding lease and

subsequently brought into use by that person for the purpose of a qualifying activity

• Change in the nature/conduct of the trade carried out by a person other than the person incurring the capital expenditure.

Download the AIA changes 2014 Fact Sheet

Download the AIA 2104 Changes Fact Sheet for much more information about the AIA opportunity for business and answers to your AIA queries.

Alternatively call us now on Tel: 01494 611 456 to discuss AIA, your capital equipment requirements and leasing options.

Choose WestWon As Your Office Leasing Partner

May 1, 2014/0 Comments/in General, Office Equipment Leasing/by Jess Wells-Flint

Leasing allows your customers to acquire the office furniture and fit out services they need now … and pay for them over time.

And, of course, your business receives full payment straight away.

Why choose WestWon as your Office Leasing Partner….

We SPECIALISE in the Office Furniture and Fit Out sector – download our DREAM OFFICE furniture brochure for more information. Or call Tel: 01494 611 456 to request a hard copy.
We INVEST in generating business. We consistently rank in Google searches for office furniture and fit out leasing. If customers haven’t found a supplier yet, we pass leads to our leasing partners – businesses like yours!
We fully ADMINISTER leasing deals on your behalf – from producing great rate instant quotes to paying out your invoices fast.
We INNOVATE so you can be first on board with exciting new concepts such as our Online Furniture Leasing Shop.
Many more benefits – just ask!

Call us now on Tel: 01494 611 456. We’d love to hear from you.

More about WestWon

WestWon is a leading furniture leasing company, providing asset-based finance for all types of organisations throughout the UK and N. Ireland.

Using the latest online technology our goal is to help our partners to grow their businesses through the provision of leasing services.

As a member of the NACFB and FLA, WestWon we fully endorse the principles of transparency in all our transactions, adherence to industry best practices and service excellence.