Asset Based Finance for Businesses in Klerksdorp

Asset Based Finance for Businesses

Asset Based Finance for Businesses

Asset based finance, also known as asset based lending (ABL), is a form of business financing where a company uses its assets as collateral to secure a loan or line of credit. It provides businesses with the ability to borrow funds based on the value of their assets, such as accounts receivable, inventory, equipment, or real estate.

Asset finance offers several benefits for businesses

  • Improved Cash Flow: Asset finance allows businesses to acquire the necessary assets without making large upfront payments. Instead, they can spread the cost over time through regular instalment payments. This helps to preserve working capital and maintain a healthier cash flow for day-to-day operations.
  • Access to Essential Assets: Asset finance enables businesses to acquire or upgrade vital assets, such as machinery, equipment, or vehicles, which are crucial for their operations and growth. By spreading the cost over the asset's useful life, businesses can benefit from immediate access to modern, efficient, and productive assets.
  • Flexible Financing Options: Asset finance provides various flexible financing options tailored to the specific needs of businesses. These options can include hire purchase agreements, finance leases, operating leases, or asset based lending. The flexibility allows businesses to choose the most suitable structure and repayment terms based on their financial circumstances.
  • Diversification of Funding Sources: Asset finance offers an alternative source of funding beyond traditional bank loans or equity financing. This diversification can be beneficial, especially for businesses that may face challenges in accessing conventional funding or want to reduce their reliance on a single funding source.
  • Preservation of Credit Lines: By utilising asset finance instead of traditional loans, businesses can preserve their existing credit lines with financial institutions. This leaves them with additional borrowing capacity for other purposes or unexpected financial needs that may arise in the future.
  • Tax Benefits: Depending on the jurisdiction and specific arrangements, asset finance can provide potential tax advantages. For instance, businesses may be able to claim tax deductions on lease or hire purchase payments as operating expenses, effectively reducing their taxable income.
  • Asset Management Services: Some asset finance providers offer additional services related to asset management. This can include maintenance, insurance, or disposal of assets at the end of the finance term. Such services can help businesses simplify their asset management processes and focus on core operations.
It's important to note that the benefits of asset finance may vary depending on factors such as the nature of the business, the type of assets involved, and the terms and conditions of the specific financing arrangement. Evaluating the costs, risks, and suitability of asset finance options in consultation with financial advisors is recommended to determine the best approach for a particular business.

TWH Consulting offers asset based finance for Businesses in Klerksdorp and invites you to apply by clicking here.

We service the whole of South Africa from our head office in Cape Town and branches across South Africa.

CAPE TOWN PRETORIA BLOEMFONTEIN JOHANNESBURG EAST LONDON DURBAN Port Elizabeth Gqeberha KEMPTON PARK POLOKWANE NELSPRUIT GEORGE RUSTENBURG GERMISTON VEREENIGING BELLVILLE KIMBERLEY KLERKSDORP VANDERBIJLPARK PAARL SOMERSET WEST LOUIS TRICHARDT Pietermaritzburg Centurion