Re: New and Used Plant Finance
Well you are right there, although HP is still a major part of the business we do we are always looking to varied ways of funding.
To give you an example of a deal I am currently looking at where the company are looking to purchase 3 nearly new excavators for around 50k: they do not have a massive amount of cash just sitting around for the deposit so instead we have looked at putting some unencumbered machines forward as deposit. The finance company have taken a couple of older (2002) dumpers and valued them equivalent as the 5k deposit they would have been looking for.
It is also very true that finance companies will now look a vat deferment but not in every case. I have a few clients that will only every opt for lease purchase, for anyone that is not aware this is where you effectively lease the asset on a fixed monthly rental and have the option at the end to buy, give back or continue to lease via a secondary rental. Most clients with plant just make a payment of generally 2 rentals to take title of the equipment and then either continue to use or sell the item.
For a finance company it is all about risk ratios so when thinking about buying and looking to get the best rates, remember these points:
Age of the asset, what will it be worth in 3-5 years
How long has your company been running
Are you home owners
deposits (the bigger the better).
Great rates:
Established company, brand new kit, home owner, good net worth,10% deposit over 3 years,
Ok rates:
New starts, kit over 4 years old, breaking even, 10% deposit over 4 years.
None starter:
New start, Kit 10years old, tenant, losing money every year, no deposit over 5 years
Finance Lease: Deposit + 24-72 monthly rentals + vat each month
Hire purchase: Deposit + all vat upfront then 24-72 monthly payments
Sale and leaseback: No deposit + 24-72 monthly payment
Hope fully I have explained some options but there are so many more which I am sure we will cover over time.
|