Capital Finance for Small Business

Capital finance is used to purchase equipment that generates income or makes an investment to expand your business or invest in new opportunities. Typically, secured by the underlying asset, or unsecured such as equity or bonds issued by the company, can also be secured against the business income such as accounts payable and receivable. Accrutus Capital facilitates multiple small business funding options that suit your stage of growth.

Capital finance or equipment finance is a commercial loan for any piece of equipment that is used to operate, set up or generate income within your small business. There are a few ways to structure the equipment finance through simple unsecured business loans or using the asset as security to underwrite the finance such as Hire Purchase, Chattel mortgage or a Finance lease.

Smart business owners should implement both a short term and long term capital finance strategy to navigate the cash flow highs and lows while driving sales. Understanding how and when to use capital finance for equipment, or unsecured short-term business finance to protect your personal assets, is very important.

Capital Finance via alternative lending

Getting the right financial product for your small business is important. When seeking small business funding perform a worst case funding scenario and costs analysis against current sales and projected revenue to calculate capacity. Understanding which capital finance options suits your growth stage and industry type will improve your chances of approval and minimize strain on the business.

What is the difference between loans, leases, cash advances and factoring?

The biggest difference is cash advances and factoring are not loans, they are an advance against your current and future sales. The main advantage of alternative capital finance is flexibility and simplicity, requiring fewer documentation over banks. Time is money and fast access to short-term business finance can prevent financial disaster. The wrong finance facility can cripple your small business and further impact your capacity to borrow in the future. Equipment finance has multiple loan structures spread over a longer term.

An Equipment Finance Lease is a rental agreement. The vehicle is owned by the finance provider or lender (the leaasor) and then leased to the user (the lessee) for a set term.

An Equipment Finance Commercial Hire Purchase is where you hire the goods or equipment and repay over a set term. Title is transferred when the last payment is made.

An Equipment Finance Novated Lease allows you to maximize salary packaging by providing a vehicle to employees. Also reduces company costs.