Receiving finance is one of the most common ways for SMEs to start their business growth and development. A cash injection into the firm allows for the leasing of new equipment, software and hardware, which can offer dramatic improvements to productivity and efficiency. However, attempting to secure lease finance can prove to be difficult, and the process may present a learning curve to those unfamiliar with the system. As such, we have produced a short guide on how to significantly increase your chances of securing lease financing, as suggested by our experts.
1. Be specific from the outset
Whenever you approach a lender, it is always good practice to be specific about the amount you want, rather than suggesting a ballpark figure and letting the lender do the work. By presenting your case of how much you want, and a breakdown of what this money will be used for, this will show the financer that you have thought about the issue carefully, and have made specific plans, indicating your commitment to the process.
2. Talk about your contributions
Lenders will also want to know the amount of money you will be putting towards your end goal. Asking a lender for £10,000 for the leasing of new assets, without risking any of your own money in the investment at the same time is unlikely to be looked upon favourably. Discussing the amount of money your SME is putting towards the end cost, especially in the context of your entire cash flow process, will encourage favourable responses as the business will work harder to minimise the risk to their own money.
3. Have a financial plan
Not only do you need to be specific about how much money you require, and what you will do with this new finance, but SMEs must also ensure that they provide their financer with a detailed financial plan. Predicting profit budget and cash flow forecasts based on your up to date data will allow lenders to gain confidence in your plan as a whole, as well as your organisational abilities. This plan should also contain details about how you will stick to it, as well as containing contingencies for accidental incorrect forecasts and other similar problems.
Securing lease financing – where to find out more
If you need help securing lease financing for your SME, please get in touch with us. We enable companies across the UK to acquire much needed capital equipment through leasing and can offer financing for many different requirements from asset finance to business expansion and invoice financing.
Find out about the different types of finance we can provide on our Alternative Finance page.
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