There are a lot of things that customers consider when choosing which business to use, such as convenience, cost, availability and how your brand makes them feel. One of the most important factors, however, is the quality of your service.
If your equipment is outdated, it can be tough to meet customers’ expectations. But upgrading your equipment can be expensive, and many businesses don’t have the liquid cash to make these payments upfront.
Earning the money you need to replace your equipment can take a long time, especially if a key competitor can provide a superior service. But you can skip the wait and upgrade your equipment right away with an affordable, low-risk asset finance contract.
That way, you can increase your earning potential and market share with a higher quality service and avoid the hidden costs of delaying your equipment upgrades.
How to upgrade your equipment with asset finance
Before we explore the hidden costs of equipment upgrade delays, let’s quickly cover how asset finance helps your business.
Asset finance is a type of lending that gives you quick access to new assets or working capital. This lets you upgrade your equipment or expand your services without spending months or even years saving up the money.
There are a few different types of asset finance, such as hire purchase, asset leasing or the vehicle-specific contract hire. Each has its own characteristics. But fundamentally, asset finance allows you to do one of two things:
- Lease an asset from a lender, with the option to return it or buy it off them at the end of your contract
- Get a loan from a lender by offering your existing assets as collateral
What makes asset finance a low-risk option is that if you ever default on your contract, the lender recoups their costs by claiming ownership of the asset in question. So even in the worst-case scenario, you can protect your most critical assets from repossession and avoid bankruptcy, letting you stay in business.
That said, asset finance contracts typically have much more favourable rates and terms than traditional loans – especially when you use an asset broker like Kane Financial Services. This makes it much easier to keep up with your monthly repayments, which typically come with a fixed rate of interest.
And since you can use your newly acquired assets during your contract term, you can put them to work earning money immediately. Often, this boost to your income will quickly eclipse the amount you borrowed, making your asset finance agreement easier to repay.
Is asset finance right for my business?
You can use asset finance to acquire very expensive equipment at short notice. This makes it a very popular choice for multi-million pound industries such as agriculture, construction or aviation.
But asset finance can also help small local businesses acquire IT equipment, office equipment, leisure equipment and other assets they need to grow.
No matter what your size or industry, we can help you find an asset finance contract that lets you upgrade your equipment and grow your business.
The hidden costs of delaying equipment upgrades
There are two main hidden costs of continuing to use outdated equipment:
- The additional expense of running less-efficient models
- Potential income opportunities lost by turning down work you can’t handle
To show these hidden costs in action, let’s look at two examples.
Asset finance for construction
Imagine you’re a road surfacing contractor whose business typically pulls in around £500,000 a year performing small-scale works.
You started your business by purchasing used rollers and other equipment. This was the right move at the time. But your machines are outdated, fairly expensive to run and need frequent maintenance. So you end up spending around £30,000 a year just to keep them operational.
As such, your annual gross income is just enough to pay wages and cover your business expenses – but not to grow.
You know that upgrading your equipment would reduce your operating costs, allowing you to take on more projects and boost your income. But you don’t have the working capital you need to buy new machines.
However, you take out an asset finance contract that lets you acquire £150,000 worth of upgraded equipment.
The contract has good rates and terms, letting you keep your overheads low. And since the monthly repayments are predictable, they’re easy to budget for.
Your new machines run much more efficiently and don’t require as much maintenance. You also increase the size of your fleet, letting you take on additional contracts that you previously had to turn down.
Your maintenance costs – previously £30,000 a year – now drop to just £10,000. But thanks to your new contracts, your annual income also grows to £700,000.
In this case, your asset finance contract has not only saved you £20,000 a year. It’s also helped you earn an extra £200,000 by taking on more work.
That means you’re now getting a massive £220,000 extra every year!
Since your asset finance contract valued £150,000, you’re able to pay both the principal and interest comfortably and quickly. But even when your contract is over, your lower maintenance costs and greater income remain!
Asset finance for beauty
Even if you’re not dealing in the six-figure range, asset finance can still help you avoid hidden costs.
Perhaps you run a small-scale beauty salon. You have a good number of local clients, but your premises needs work.
You take out a smaller beauty equipment asset finance deal to redecorate your premises and replace your aging furniture. This makes your salon more inviting and comfortable for your clientele.
You also invest in some new equipment to offer more diverse services, such as facial steamers, tanning beds and hair removal equipment. These items aren’t too expensive, but you know you can earn a good amount of money for each booking.
Your improved premises and superior services make your salon more relaxing and satisfying for your customers. They’re happy to spend more money on treatments, and then recommend you to their friends.
This lets you grow your beauty business with a small, affordable asset finance contract – and earn the money you need to pay it back no problem!
Upgrade your equipment with Kane Financial Services
Asset finance is an affordable, low-risk way to upgrade your equipment and avoid hidden costs. But there’s a secret that lets you spend less and gain more: use an asset finance broker.
At Kane Financial Services, we’ve spent more than 35 years making connections with top lenders in a wide range of industries throughout Northern Ireland and the UK. That means we can connect you with exclusive deals that high street lenders simply can’t match!
Apply for asset finance online today to see the options available to you, or contact one of our expert advisors to find out more.