When it comes to acquiring assets for your business there is a real alternative to short term funding like bank overdrafts:
-
Working capital is not tied up in depreciating assets
-
Payments are fixed which means you can budget accurately
-
Providing the instalments are paid, the facility cannot be withdrawn – unlike bank overdrafts
-
It creates an additional line of credit outside normal funding arrangements
-
The cost of acquiring the asset can be spread to coincide with the timing of revenue generated by the business