EQUIPMENT FINANCE SOLUTIONS
OUR FINANCE PRODUCTS Financing of equipment is increasingly in demand. Typically equipment depreciates quite quickly; as a result many businesses will seek to spread the cost of acquisition over the expected life of the asset to help overcome this and leasing can be a good solution. Preserving capital for operational costs, purchasing stock, identifying new products and business opportunities that may arise are key drivers of growth. Asset finance will assist you in obtaining a wide range of equipment requirements and helps you to spread the cost of investment. Wholly or largely secured on the assets being financed, the need for large deposits is reduced, giving you the flexibility to replace or upgrade equipment at any time. FINANCE LEASE Equipment leasing transfers substantially the rights and obligations of ownership to you and can be for any length of time up to a maximum of five years. During the life of the agreement the full value of the equipment appears on your balance sheet as an asset and liability, with an element of the rental treated as a business expense and appearing on your profit and loss account. You are responsible for maintaining and insuring the asset during the life of the agreement. HIRE PURCHASE Hire Purchase is again an alternative to outright purchase, where the lessor i.e. LDF will purchase the equipment on your behalf. We maintain ownership of the asset until the final payment is made and at this point you have the option to purchase the asset for a nominal sum. During the agreement the full value of the asset appears on your balance sheet as an asset and liability, an element of the rental however is treated as a business expense and passed through the profit and loss account.
CHOOSING THE RIGHT TYPE OF FINANCE At LDF we aim to make finance easy for our customers. We take a commercial approach to business finance and can provide solutions for a broad number of requirements. We pride ourselves on our ability to enable businesses to grow and acquire the assets they need both quickly and easily. We always recommend that you seek to discuss your expenditure plans with an accountant or other relevant adviser, however we have produced a simple guide to provide some clarity around key product features. Frequently asked questions Finance Lease Hire Purchase Will I be able to own the asset? Potentially Yes Are rentals tax deductible? Interest Only Interest Only Can I claim Capital or Annual Investments Allowance? No Yes Does this route preserve capital? Yes Yes Can I have a fixed term agreement? Yes Yes Can the term be extended? No No Will the agreement be made on demand by LDF? Potentially Potentially Do I need to pay the VAT Upfront? No Yes Is the asset off balance sheet? No No Can VAT on payments be reclaimed? Yes No Do I have to insure the assets under the agreement? Yes Yes Can VAT on the cost of the asset be reclaimed? No Yes Will I need to pay a facility or arrangement fee? Yes Yes Remember: Where VAT classified as reclaimable assumes your business is VAT registered The tax and VAT treatment may differ dependent upon the asset finance products Facilities can be made on demand in accordance with the terms and conditions of the agreement Please seek specialist advice on VAT and tax relating to your business Please note that security may be required and product fees may apply.
BENEFITS OF FINANCING HOSPITALITY & LEISURE EQUIPMENT Join a growing number of businesses enjoying the benefits of finance with LDF. Flexible Payment terms and profiles can be tailored to meet cash flow Allows for equipment upgrades Can include hardware, software, training, installation and support services Easier Budgeting Makes budgeting and forecasting easy with fixed payments Avoid fluctuations in interest rates The real cost of acquisition reduces as inflation rises Tax Efficient Leasing is Tax deductible, reducing the net cost of obtaining the equipment * Maximise Budget Spread the cost of purchase; make your budget work harder Conserve Working Capital Helps to reduce initial cost outlay Allows capital to be invested in other important growth areas Convenient Easily manages supplier(s) payment terms and administration requirements Payments are made by Direct Debit 5 * For further information surrounding taxation, please consult your Accountant
WHY CHOOSE LDF? EXPERIENCE We ve been helping businesses to grow through finance for over 30 years. As the UK s largest independent provider of SME finance solutions, we are committed to delivering excellence to our customers, be that through our high levels of service, our technology led approach or the fact that as both a funder and a broker, we are able to deliver the most appropriate funding solutions available to us. We re very proud of our 4.9 star rating, reflecting our commitment to service and customer satisfaction. As specialists in asset finance our aim is to maintain consistently high levels of service for our customers and partners through technology and a personal approach. EXCELLENCE IN SERVICE Independent Service Rating MODERN FUNDING We aim to provide our customers with access to competitive funding solutions by using our own book lending and constantly reviewing pricing to ensure we remain competitive. As both a funder and a broker, our aim is to provide finance for a range of credits through our three-tiered funding model, helping us to achieve market leading acceptance rates. 6
ASSET FINANCE: FREQUENTLY ASKED QUESTIONS What finance options are available? The most popular asset finance products for SMEs are Finance Lease and Hire Purchase agreements, both are similar in nature however enable different tax incentives to be maximised based on asset ownership. How flexible is asset finance? All LDF finance solutions can be tailored to meet multiple supplier purchases and payment terms, and repayments can be structured to meet seasonal trading by adjusting repayment amounts (if required). We will work to understand your business and deliver the most appropriate solution. What can asset finance be used for? Asset finance is suitable for a large selection of equipment purchases, with finance available from 1,000 to many millions in value; purposes can be anything from IT Hardware & Software, Lighting, Catering, and Plant & Machinery Equipment, to installation, support, maintenance and training. Put simply, if it s important to the operation and development of your business, we can help to find a solution that fits. Why would I not use cash? Capital is a valuable asset in any business. Asset finance, allows you to acquire the assets you need, when you need them whilst having little impact on cash flow, it also helps to accelerate a more rapid return on investment. Spreading the cost allows for existing capital to be retained and invested in other areas of your business (acquisitions, increasing sales heads, training etc).
Isn t my bank the best source of finance? Whilst bank finance plays an important role in business growth, access to finance remains an area of difficulty for some businesses. Additionally, the variety of available facilities may not always match that of a corporate finance company. With businesses looking for rapid and often alternative solutions to business investment, many will now look to facilities provided outside of traditional banking options. Does business trading performance limit options to finance? We pride ourselves on delivering access to finance for all business stages and performance, whether new start or well established and both small and large companies. Whilst we take an element of security in the asset, we also review the credit history of your business and its financial performance. Ultimately however, it is our aim to provide finance by matching the risk vs. return on capital. How long does it take to arrange? The main driving factor behind the time taken to arrange is the amount of finance required; Typically an asset finance request below 50,000 will take less than 24-working hours for a credit decision however this is often much sooner. Our internal systems and supplier platforms support an efficient processing model. If all parties are fully aligned, it is possible to complete a transaction from proposal to signed documentation and pay-out within one working day.
If I use asset finance, do I need to insure the assets? Yes. As soon as you take delivery of the assets you are obliged under the terms of the agreement to insure this against loss and/ or damage. You will be asked to provide details of your insurance policy, should this not be evidenced, our nominated third party insurance provider will contact you by post to set this up. Will we need to provide additional security? An element of comfort is taken in the asset dependent upon the depreciation levels the asset holds against the lifetime of the agreement. Alongside this, we may ask for a guarantee if the amount of borrowing is considerable and your balance sheet is developing or growing. Can I make changes to my agreement during the term? Yes. Flexibility is one of the key benefits of asset finance. We understand that you may wish to upgrade your assets or add additional assets to your business. Typically we allow for upgrades or additional assets to be added to a new agreement when 50% of the original agreement term has passed or where system mandatory upgrades are needed. Please note however, that upgrades are subject to both credit and underwriting. How can I discuss finance or obtain a quotation? You can very quickly obtain information about how asset finance can help you by speaking with your LDF approved equipment supplier. They can provide you with a quotation via access to our mobile quotation and finance proposal app.
We re very proud of our 4.9 star rating, reflecting our commitment to service and customer satisfaction.
CONTACT US LDF www.ldf.co.uk 01244 525410 inbound@ldf.co.uk ECONOLISER www.econoliser.com 028 9041 9874 info@econoliser.com
LDF Operations Limited (reg no. 02029122) part of the LDF Group is authorised and regulated by the Financial Conduct Authority for credit-related business (including hiring).