Whilst bank finance plays an important role in business growth, access to finance remains an area of difficulty for some. Additionally, the variety of available facilities may not always match that of your business. In fast moving sectors facilities provided outside of traditional banking options are often the better option, as more and more SMEs are realising. Between 2012 and 2014 finance by SMEs from non-bank funding rose from £267m to £1.74bn according to Nesta.
But what are the options available and what is the best type of finance for your business?
Asset Finance
Asset financing of equipment is ever increasing and in demand. Typically business critical assets are rapidly depreciating; therefore many businesses will seek to spread the cost of acquisition over the expected life of the asset via leasing.
Preserving capital for operational costs, purchasing stock, identifying new products and business opportunities that may arise are key drivers of growth in the sector and make the benefits of asset finance clear.
Asset finance will assist you in obtaining a wide range of equipment requirements and helps you to spread the cost of investment. Wholly or largely secured on the assets being financed, the need for large deposits is reduced, giving you the flexibility to replace or upgrade equipment at any time.
Business Loans
Whether your business is looking for additional capital or ways of spreading capital expenditures, recurring costs (such as Corporation Tax, VAT, Insurance) or growing your business through purchasing stock, acquisition or marketing, are all key barriers to growth.
Short-term business loans help you to cover specific business purposes and enable essential costs to be spread over a 3 to 12 month term. A longer term Business Development loan can help SMEs drive growth and finance development. It can help your business raise the capital required to cover a range of costs over an extended loan period of between 12 months and 5 years*.
What's right for you?
The right type of finance for you ultimately depends on the purpose of the finance and your specific business requirements. The table below matches the best type of finance to the required purpose:
| Purpose | Short Term Business Loan | Business Development Loan | Finance Lease/Hire Purchase |
| Annual Subscriptions | ✔ | ||
| General Equipment Purchases | ✔ | ✔ | |
| Furniture and Fittings | ✔ | ||
| EPOS | ✔ | ✔ | |
| IT & Telecoms | ✔ | ||
| Software Licenses | ✔ | ||
| VAT Payments | ✔ | ||
| Tax Payments (Corporation & Income) | ✔ | ||
| Refurbishments | ✔ | ✔ | |
| Building Renovations | ✔ | ||
| Stock Purchases | ✔ | ||
| Cash Flow | ✔ | ||
| Business Acquisitions | ✔ | ||
| Debtor Relief | ✔ | ||
| Relocation Costs | ✔ | ||
| Training Costs | ✔ | ||
| Delivery Service Fees | ✔ | ||
| Marketing & Advertising | ✔ | ||
| Office Insurance Premiums | ✔ | ||
| Research & Development | ✔ | ||
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Why LDF?
At LDF we do our best to make finance easy and uncomplicated for our customers. We take a commercial approach to business finance and can provide solutions for a broad number of requirements whether tangible equipment or intangible growth requirements or cash flow. LDF have a strong history in providing finance and leasing solutions whether directly to businesses or via equipment manufacturers and resellers with whom we partner. Download our guide to Finance Solutions to learn how LDF can help your business grow.
*Currently only professional practices qualify for our maximum term of 5 years and all other SMEs qualify for loans up to a maximum term of 3 years.
