Start Up Business Funding UK How many new companies start up in the UK? If you are starting up your own business, then you are not alone. In 2016, 440,000 incorporated companies were set up and upwards to another 200,000 soles traders/partnerships. After the US, the UK is one of the most entrepreneurial counties in […]
Perhaps like many businesses, from new start ups and SMEs to larger companies, you have come round to the idea that there must be a better way to secure funding for your business plans than relying on bank lending. Despite recent initiatives, securing finance this way still remains a tricky and long-winded process, whereas equipment leasing can be very quick to arrange and avoids the need for upfront capital outlay.
Leasing enables you to pay for the equipment you need over a fixed period of time – typically two to five years through a series of contractual, tax deductible payments. Put simply, the leasing company (the lessor) buys and owns the asset. The customer (or lessee) then hires use of the asset, paying rental over a fixed period. At the end of the contract, the customer usually has a choice of extending the lease, buying the asset or simply returning it.
Clearly, if you have not undertaken a lease finance agreement previously, you will wish to research the topic thoroughly. That’s where the Financing Your Business Plans: WestWon Guide to Leasing comes in: it has been written to help businesses like your get up to speed with leasing terminology and to provide a concise overview of leasing. It is available to download from the website now.
This essential guide contains the information that you need to know about the benefits of leasing, the process, the options available, the things to consider and questions to ask when choosing a leasing company. After all, selecting the right company to work with is vital. As with entering into any new contract, when opting to lease equipment it is important to choose a reputable leasing partner.
For more tailored information on your business leasing options, please call WestWon on Tel: 01494 611 456
For an outline cost comparison of Leasing versus Buying business equipment. please take a look at our Equipment lease calculator.
According to new research by the Asset Based Finance Association (ABFA), over the past year small businesses must wait 23 days longer on average for payment compared to larger companies. The figures show that companies with a turnover of less than £1 million have waited an average of 71 days to receive payment, while those with a turnover of more than £500 million were paid in an average of 48 days.
Two in five small firms cite ‘invoice lost or not received’ as the excuse they were given for late payment. And worryingly, one in three is being forced to write off bad debts every year.
This is despite the Government putting pressure on big firms to sign up to the Prompt Payment Code (PPC): in fact, the current wait of 71 days for small businesses is a week longer than in 2006.
The PPC was set up in 2008 to improve small firm’s stability by helping them recover the billions of pounds owed to them in late payments more quickly. It is a voluntary register of almost 1,700 UK companies that have committed to pay invoices in accordance with contracts. But there are no sanctions for breaching the code.
ABFA Chief Executive Jeff Longhurst said, “These figures highlight that the relationship between some big businesses and smaller companies has become even more unbalanced since the credit crunch. It is alarming to see how much longer small and medium sized firms are waiting to receive payment compared with just a few years ago.”
Phil Orford, Chief Executive of the Forum of Private Business said, “Late payment continues to escalate in size and impact on small businesses. With companies facing sizeable cost increases over auto-enrolment of staff into pensions, we need to make sure cash flow is as good as possible.
WestWon CEO Jeremy Hall commented, “On-going issues with late payments and the knock on effect on cash flow is putting some small businesses in financial difficulties and it certainly makes it more difficult to make the investments they need in the recovery economy.
“At the same time we have seen a growth in the number of small businesses seeing equipment leasing as a vital financial tool in their kitbag. Asset-based finance enables them to spread the cost of essential capital investments over time, rather than having to tie up large sums of capital upfront – and given the current climate, they may well need the flexibility to deploy available funds elsewhere.”
Research from bank transfer service BACs revealed in July 14 that late payment debt is now £40 billion, up from £30 billion last summer. The forthcoming Small Business enterprise and Employment Bill will legislate for greater transparency of payment practices, with large companies required to publish their practices and how they perform against them. But whether this will be sufficient to tackle what is a huge issue for the recovery and small business investment remains to be seen.
Asset-based finance is an ever more attractive way for SMEs to acquire the machinery and equipment they need to run their businesses and invest in up-to-date IT technology to keep their infrastructure working efficiently. Leasing is also available to cover the cost of office refits, fit outs and refurbishments, which form an essential part of most companies’ business plans.
These leasing benefits are particularly important for SMEs and Start Up businesses too as they enables them to manage the acquisition of equipment and related services as a predictable monthly or quarterly expense rather than a capital cost, offering clear advantages in terms and tax and budgeting. After all, no business pays three years’ salary for its staff in advance, so why pay for the equipment they use upfront rather than over its useful life.
Whether for new business start-up or an established SME trying to stay competitive, leasing can generally be arranged in a relatively short timescale subject to status, allowing businesses to acquire the equipment they need when they need it.
SMEs looking at their finance options can obtain an instant leasing quote online using the WestWon lease calculator to help with budget planning. You can also email us with any queries at [email protected] or call on Tel: 01494 611 456. We are here to help you grow your business.
WestWon also provides a series of Leasing Fact Sheets for businesses wishing to find out more about leasing for their particular sector – for example, public sector leasing, catering industry leasing and medical and scientific industry leasing as well as general topics such as ‘Leasing Questions Answered’. You can also download the free guide to leasing – Financing Your Business Plans.
For companies in 2014 – and particularly for SMES – cash flow remains key to running a viable business. So when it comes to investing in new business assets, for example manufacturing equipment, kitchen and catering equipment, office furniture and fit outs and refurbishments, IT infrastructure and computer hardware and software, you name it…, there is always a trade-off to be made.
Should you tie up existing capital and lines of credit to grow your business, or do you wait for better times, but risk losing competitive edge and profits? Or do you look at other options such as leasing…
Leasing is a popular solution for SMEs looking to acquire fixed assets such as machinery and equipment.
There are several types of lease agreement, which allow companies to acquire the assets they need to run their businesses without upfront capital outlay. What leasing does is enable you to pay for the equipment you need over a fixed period of time – typically two to five years – through a series of contractual, tax deductible payments.
Under a commercial agreement, the leasing company (the lessor) buys and owns the asset. The customer (or lessee) then hires use of the asset, paying rental over a fixed period. At the end of the contract, the customer usually has a choice of extending the lease, buying the asset or simply returning it.
Whether for specialist machinery, recycling equipment, photocopiers or any sector-specific investment, leasing offers the benefit of allowing you to spread the payment cost over the useful life of the asset.
Clearly every business should carefully assess their options in this respect and also the types of equipment leases available as well as the best leasing deals around as these can vary.
However in most cases there is a strong argument for making the lease versus purchase comparison before committing funds either way. You can find out a lot more about the mechanics of leasing by downloading Financing Your Business Plans – the free WestWon guide to leasing.
If you know what equipment you require and how much it costs, you can also get an instant leasing quote online by using the WestWon equipment lease cost calculator. And, of course, you can always call our leasing helpline on Tel: 01494 611 456 and we’ll be happy to answer any queries you may have.
What can you lease for business? Did you know that organisations both large and small – well-established and even new start SMEs too – can lease almost any type of business equipment, hardware, software, office furniture and fit outs, not to mention moving premises and machinery? In fact, if you can name it, you can probably find a food lease option for it too … yes, including the staff room kitchen sink! You simply chose the equipment you need to grow your business and the leasing company – like WestWon leasing – provides the asset funding.
Most if not all business sectors use asset-based finance as part of their financial planning. We regularly arrange lease finance agreements for organisations requiring:
WestWon is a leading UK leasing company completely independent of any supplier or manufacturer, you can choose any combination of equipment and technology you require for your lease agreement. WestWon is also happy to help recommend suppliers if you don’t have one in mind.
For more information about how leasing versus buying can work hard for your business, contact WestWon on Tel: 01494 611 456.
In 2013 raising finance for new business equipment and assets has continued to be a thorny issue for companies, particularly SMEs and start ups. Bank lending figures are still falling and many businesses are turning to alternative sources of funding such as asset finance and leasing.
You can lease almost any type of business equipment from tablets to boardroom tables and IT services to complete office refits. WestWon is an independent asset finance and leasing broker (and a member of the Finance and Leasing Association and National Association of Commercial Finance Brokers) which means you can choose any combination of equipment, technology and maintenance you require for your lease agreement. Sectors that regularly lease equipment include:
What else companies lease? See the WestWon Leasing Video for more ideas. Or call us today on Tel: 01494 611 456.
You can also visit our website to use our Free Instant Lease Calculator to show you how the cost of leasing an asset compares with purchasing your new equipment.
Whether you are a new start business, an SME or a large company, you may find yourself thinking about leasing equipment, machinery or office furniture, fit outs and moves for the first time. Perhaps you have moved companies, taken on a new role within your existing company or are simply expanding fast and wish to safeguard your all important cash flow. Whatever the circumstances, here are 3 useful things that you should know about leasing…
When you enter a lease agreement, the contract is between your business and the leasing company. Simply select the equipment you require and agree the price with your chosen supplier. A lease agreement is then drawn up by the leasing company.
Once the lease documents have been signed and returned, arrangements will be made for the supplier to deliver the equipment. On receipt, you sign a ‘certificate of acceptance’, which effectively states that you have received and are happy with the equipment. The leasing company then pays the supplier. You pay the company (the lessor) a regular rental payment, typically across two to five years.
The rental is calculated by adding the equipment price after the Residual Value has been deducted, plus the interest due over the term of the agreement. The interest will depend on the amount you finance, the term of the agreement and frequency of repayments. It works just like a mortgage – the shorter the term, the less interest paid.
Selecting the right company to work with is vital. As with entering into any new contract, when opting to lease equipment it is important to choose a reputable leasing partner. A recent BBC Panorama documentary highlighted the need to diligently check the credentials of any company you may wish to deal with. Remember to always choose a leasing company who is a member of industry bodies such as the FLA (www.fla.org.uk) and NACFB (www.nacfb.org), which ensure best practice. Members of the NACFB operate under an Office of Fair Trading registered Code of Practice.
For more information about all aspects of leasing, please contact WestWon on Tel: 01494 611 456. You can also download a free guide to Financing Your Business Plans with Leasing HERE.
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