Asset Finance

Asset Finance Problems – Solve Your Capital Raising Issues Fast

Whats it Werth?

What's it werth?

Find out what's really going on in the Commercial Property Space with Jason Werth, our MD and Commercial Property expert.

Read Jason's views on:

  • The current Commercial Property market
  • Future property values
  • Market trends and reports
  • Sector & Geographical analysis

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Raising capital from any source, including asset finance, has remained difficult, despite a tentative economic recovery, and a slight loosening of exceptionally tight credit conditions. Whereas previously businesses would have had relatively little trouble in generating capital from the concrete assets, such as property, this avenue of raising funds has been much more difficult to access over the last 2 years.

Asset finance companies themselves are still seeing reductions in advances of credit they make against property. The latest quarterly report from the UK's ABFA (Asset Based Finance Association) has shown that ABL (Asset Based Lending) against a firm's commercial property has fallen from £297 to £237m between March 2009 and March 2010, a fall of 19%.

This may in part be attributed to a weakening commercial property market over the last few months. Asset finance activity related to property is quite sensitive to the underlying value of the asset the credit is secured against.

The most recent report (June 2010) on the capital value of the UK's commercial property sector, by IPD (Investment Property Databank) states that "UK commercial property capital appreciation has eased to its slowest quarterly growth since the rebound began last August, at 1.9% over the second quarter."

Whilst the outlook remains poor for commercial property values, it seems unlikely that there will be a significant improvement in the funds made available from the asset finance sector.

With no immediate hope of a rebound in access to asset finance, what other options are available to the small and medium size enterprises (SMEs) needing funds quickly? One possible solution is to look towards a total release of the capital value of your fixed assets - and for many firms, the business premises will be one of their higher valued capital assets.

This is where SellMyCommercialProperty can help. We specialise in helping clients realise the value of their premises, without adversely affecting their security of tenure. Your property is sold to SellMyCommercialProperty, and then simply leased back to you, at mutually acceptable terms.

If staying in your premises is a prime concern, then undertaking such a sale and rent back agreement could be for you. Such arrangements are readily arranged for freeholders, or owner-occupiers, who have the right to buy or sell the commercial property.

One advantage is that you can very quickly realise the whole asset value (unlike in asset finance deals, where typically only 60-70% of finance is made available under the credit facility). Another plus is that asset finance arrangements typically involve a relatively high mark up on the cost of finance - the interest rate can be as high as 10% over the current base rate.

In contrast, SellMyCommercialProperty can undertake valuations within 2 days, if necessary, and can then move to quickly to agree the deal that will release your funds. There are no fees and no interest charges ongoing. You can also opt to receive cash if you would prefer. A sell and rent back might really be the best way forward for asset finance for your company.

What to do next

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If you have any other burning questions, you can email one of our property experts on enquiries@sellmycommercial and we will answer your questions in a flash

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