Helpful Terminology Definitions – Part One

In this month’s blogs, we’re going to be giving you some helpful definitions for some of the most common terms that we use day-to-day when working with our clients and providers. We hope you find this useful!

Asset finance– Asset finance is a broad category of finance that includes Leasing and Hire Purchase. Broadly, where Asset finance differentiates itself from Equipment finance is in the size of the asset being offered. Large machinery or vehicles could be attained through our Asset Finance option, for example.

Bridging loan– A bridging loan is a type of short-term property backed finance. They are often used to fund you for a period of time whilst allowing you to either refinance to longer term debt or sell a property.

Capital – When we refer to capital we mean the money or other assets owned by a person or organization, and so when we say we can help to secure you more working capital, this is financial support that will help you to purchase equipment, assets and more.

Cash Advance – A cash advance is when you as a business may be able to access funding that you’d otherwise be expecting in the following period of business. At Simply Business Finance we can help you to secure the equivalent of up to 1 months card takings as a loan for your business, if you have a card terminal that is used for payments. This could be particularly useful for companies who are seasonal, and often see quieter or busier periods, and want to be able to cover running costs during those less busy months.

Equipment finance– Equipment Finance leases are a great option for lots of businesses as they offer flexibility and negate the need for a large deposit. Whether you’re a new or established business, equipment finance means you can fit out or upgrade your current premises – this could be anything from office chairs to new desk lamps or even software – without requiring a large cash sum upfront.

Factoring – Factoring is a useful option for when your company includes lengthy repayment terms as part of your agreement. With factoring, you can access a percentage of your outstanding invoice immediately from a Factoring company, and the rest when the Factoring company receives the money from your debtors. The Factoring company then takes a percentage for handling the invoice, but this is often a worthwhile expense, to allow you access to your hard-earned money quicker.

Join us again later in the month when we’ll be covering a few more definitions for you!

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