Machine Finance With Stage Payments
Machine finance with stage payments required by machine suppliers present a problem. Some lenders have been prepared to finance stage payments in the past but now it is very unlikely. The problem for the lender is that during the stage payment period there is no machine security in place. In the event of default the lender is left with no tangible security. Furthermore if the machine supplier goes out of business then there is unsecured borrowing for the lender and no machine for the customer but still with the liability to repay the lender.
What is the solution?
a) It will be easier to resolve before placing an order with the machine supplier. At this point you have a stronger negotiating position. You could then try and negotiate a small initial deposit, say 10% or 20%. The balance can then be paid by the lender upon delivery of the machine.
However if the supplier requires a larger initial deposit and maybe further payments before delivery then you will need to finance these yourself. A Sale & Hire Purchase Back facility can then be used and your deposit and any further payments can be refunded back to you upon delivery of the machine. The outstanding balance can then be paid direct to the supplier and the final Hire Purchase agreement completed.
b) If you do not have the cash flow to cover the stage payments then we can arrange machine refinance to finance the stage payments. Alternatively we can arrange a Funding Circle Business Loan to cover the stage payments.
Please contact us anytime for free help, advice and quotations
No Deposit Machine Finance
Premier Business Finance arrange no deposit machine finance.
This keeps your cash free for any additional working capital you may need. When buying a new or used machine often it will be for new work which means you will probably need more raw materials such as metal or wood and tools to work them for which we have this post from experts at Fixabolt.
In addition you may need to make overtime payments or take on extra staff. No deposit machine finance will keep your cash available to finance the additional working capital.
Will no deposit machine finance be approved by the underwriter?
If you are a well established business with a good set of accounts then yes! In addition VAT Deferments can also be provided in order that there is no adverse impact on your cash flow.
What if we are a new business or our accounts are not so good?
If your accounts are not so good the underwriter may require a larger deposit such as 10% + full VAT or maybe 20% + VAT. However if you need the cash for working capital than we can arrange machine refinance. With machine refinance you could raise the cash for the deposit and also raise further cash for any extra working capital needs at the same time.
Please contact us anytime for free help, advice and quotations.
BBC News – Funding for Lending bank scheme launched
The announcement for the new Funding For Lending scheme was missed by many due to the news being dominated by the olympics. The link from BBC News is below. We have made enquiries with regard to the likely impact on machine finance deals but the lenders are still not certain of the practical impact at this stage.