Asset refinancing is a popular loan scheme in which corporate financiers offer companies of all sizes. It allows them to obtain a lump sum of money against the equity value of their assets. This is a boon for those companies facing financial difficulties and who are on the verge of liquidation. Under the arrangement, the companies sell their assets to their lenders for a specific price. Then the leaders lease the assets back to the companies for a certain period in return for monthly payments. In the process, the companies are able to improve the cash flow position of their businesses. They can then use the additional funds for various purposes that help them develop their companies.
Sertant Capital – How does asset refinancing improve the cash flow position of companies?
Sertant Capital LLC is a popular equipment financing company operating from Newport Beach, California. It has a wealth of experience in the finance sector spanning 25 years. It has a mission to provide businesses of all sizes with flexible financial solutions according to their specific needs. In doing so, the professionals of this company assess their clients’ creditworthiness and revenue-generating potential. Accordingly, they offer them a wide range of favorable lending schemes. These include a capital lease, sale-leaseback, off-balance-sheet financing, TRAC leases, refinancing, progress payments, and step-up/down payments.
The experts of Sertant Capital say asset refinancing is a cost-effective way for companies to raise necessary funds. However, this lending scheme is only available for a certain category of assets. These include vehicles, all kinds of machinery, and special equipment. Moreover, the companies should have full ownership of assets without any pre-existing lien. Under this arrangement, the companies’ financiers first evaluate the current equity value of assets and specify the lease period. After doing so, they determine the amount for funds they will provide the companies and their monthly payments. Moreover, they keep the assets as collateral throughout the lease period.
The following are five reasons why companies prefer asset refinancing over traditional lending schemes:
1. This loan scheme provides companies in financial difficulties with instant cash funds against their assets,
2. Asset refinancing allows companies to preserve their existing assets and protect their merged funds,
3. Companies who opt for asset refinancing can avoid going into liquidation and the subsequent legal consequences of business closure,
4. The terms and conditions of any asset refinancing scheme are less stringent in comparison to banks loans, and
5. Asset financing makes it easier for companies to manage their cash flow as they can show monthly payments as a business expense.
The qualified team at Sertant Capital sums up by saying asset financing is a viable option for companies in financial difficulties. Under this arrangement, they can get instant cash funds by selling their assets to reliable corporate financiers. Then they can lease them from the lender in return for a monthly payment. In the process, companies can avoid going into liquidation and facing subsequent legal consequences. Moreover, they are in a better position to improve their cashflow position. Above all, the terms and conditions of this lending scheme are more flexible than traditional bank loans to give them a strategic edge in the market.