Lending to more businesses looking to buy an asset
Today, we’re pleased to announce that we are trialling a new process for asset finance loans. We have helped businesses access finance secured on a specific asset (such as a piece of machinery, equipment or commercial vehicle) since 2012, and over the last few months we have been reviewing how we can improve this experience for business owners and provide more lending opportunities for investors.
Asset finance is a competitive market which is defined by simplicity, speed and competitive rates. Businesses looking to buy an asset need more certainty over when the supplier will be paid and the interest rate that they will pay. To provide business owners with certainty of cost, asset finance loans will now be fixed rate. This will allow us to release funds for the transaction as soon as the auction ends.
As before, Funding Circle Asset Finance Limited will still hold title to the asset and in the event a business is unable to repay, we will take steps to recover the asset and sell it on behalf of investors.
A valuation of the asset will be completed by a third party specialist asset valuer, who have significant experience in valuing, recovering and selling equipment of all types. This will be provided on the financial summary page as a pdf. The recovery value of the asset is indicative and will depend on its usage and the way it’s maintained.
Whilst we will place more focus on the asset for these kinds of transactions, we will continue to carry out the same high level of due diligence when reviewing the ability of the business to afford and repay the loan. If a borrower is able to provide up to date management account information, we won’t always require bank statements for these types of deals.
We will be testing these basic processes from today, and may make further improvements as we move forward. As always, if you have any questions or feedback, then we would love to hear from you so please get in touch or join the conversation on the forum.
The Funding Circle team