Capital Equipment Leasing For A New Start Business Explained

Opening your first restaurant? Launching a gardening business, a hairdressing salon or an interior design store? No doubt about it, setting up a new start company is for many a dream come true. But as any SME entrepreneur will verify, it takes a huge amount of time planning and thought – not forgetting that all-important upfront capital to fund the dream…

Tracking down premises, staff and equipment suppliers is often the first hurdle you have to jump over. And then that big question, how do you finance the equipment and machinery you need? Whilst a friendly bank manager may lend a helping hand, many new start business owners turn to a leasing company for equipment finance.  For those new in business, the whole process can seem daunting.

How Can A New Start-Up Company Find The Best Leasing Options?

There are over 1,000 leasing companies in the UK alone, and many of them are specialists or simply just do not work with new start companies. The reasons are simple – research over many years has illustrated that the majority of new start companies do not make it to their third anniversary.

A quick search on the internet will turn up a list of names, some claiming to offer 98% acceptance rates and other purporting to be experts in new start business finance. But in truth, most asset finance companies and leasing companies will turn down a new start company without asking even the most basic of questions.

WestWon does however have a long track record in helping new start companies and takes pride in helping budding entrepreneurs get off the launchpad and into business orbit. There is nothing more rewarding than providing a lease for a person or team setting out on the road of self-employment and becoming that company’s preferred supplier of lease finance over the years to come.

Obtaining Your New Business Lease Deal

One of the first questions we ask is “are you a home owner?” Most banks will expect you to be a property owner and will turn you down if you are not.  Other things to think about are:

  • Do you have a business plan?
  • Why do you need the equipment, does it have a good resale value, have you received a discount on the RRP?
  • What investment have you made into the business?
  • What is your personal background?

Obtaining a credit acceptance for a new start company is not always easy – contrary to what some leasing companies may claim. However, by asking the right questions we are often able to present your new start business in a very positive light – an important step in securing funding.

Case Studies: Lease Deal For A new Start Restaurant and Leasing For Gym Equipment

In August 2012, WestWon organised a lease facility for over £250,000 for a new start restaurant at one end of the scale and, at the other, running machines for someone setting up a new gym. Over the years, we have financed everything from a computer to a warehouse fit out for new start companies.

What Lease Rates Can A New Start Company Get?

Rates will depend on the asset you wish to finance and the support you can offer, such as a personal guarantee or deposit. The rates will also be reliant on the term of the lease and how much you are borrowing. Typically, the more you borrow, the cheaper it is.

Some companies on the internet advertise headline offer rates from 3%. New start SMEs should not expect for one minute to get these rates. Even large, well-established companies buying assets with excellent resale values usually do not get these rates. For smaller lease deals under £10,000, typically over three years, lease rates will typically start at around 12%. It sounds a lot when you think base rates are at 0.5%, but these rates are based on risk profiles of new start companies.

Our job as a leasing company is to find you the cheapest lease price and an agreement that is appropriate for your business. We do this by listening to you and your plans. Hopefully, we will be there with you on what will be an exciting journey of business growth.

For further advice and information, please call WestWon on Tel: 01494 611 456. We’re here to help.

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