Your stocks and equipment represent a real financing solution for your business. But are you really making the most of your assets to develop your business? Companies’ tangible assets are often undervalued (or “underestimated”?) as a financial resource. They can be your stocks, for example your raw materials, your finished products, or they can be your equipment such as your machine tools, your means of transport and storage, or your machining centres. Your assets are of strategic importance to your business and organisation. At Chetwode, we help industrial companies to make the most of their assets. We are experts in equipment financing and inventory financing.
Here we summarise two articles we wrote a few months ago on strategic tangible assets with inventory financing and equipment financing. You’ll see how your strategic tangible assets can help you grow your business, and how to make the most of them.
First of all, a tangible asset is one that you can see and touch. They are located inside your company. They are, for example, your equipment, your stocks and your buildings.
Because of their organisation and activity, mainly industrial companies and sometimes commercial businesses hold tangible assets that are of strategic importance. Some of these assets are tailored to the company’s needs, or even built to order. In these cases, the machines are more difficult to replace.
Equipment finance is attractive because it allows you to retain or obtain cash. It gives you the opportunity to invest or respond quickly to a development need. What’s more, it can often be used to increase the value of assets, thereby optimising the company’s balance sheet.
To be eligible, your machinery must have a low (or slow) obsolescence rate and be easy to dismantle and transport.
Your equipment will be valued, which will serve as a basis for assessing the amount of finance. A contract (sale and leaseback or secured loan) will be signed, and the investor will be able to sell the equipment at the end of the contract if you don’t want to keep it. Click here to find out more about equipment finance.
Inventory financing is a quick solution to put in place because it is generally available immediately. It can reassure creditors in the case of fund-raising by being offered as collateral, because it will also be quick to sell if it has been well selected at the outset.
To set it up, it will be necessary to take out short or medium-term credit (in the form of a loan or bond) with the stock pledged as collateral, provided that you are an eligible industrial or commercial company. Click here to find out more about inventory financing.
Chetwode has been an expert in the financing of industrial assets for nearly 20 years, both equipment and inventory.
We can also work with you to enhance the value of your inventory in a wide range of cases: for bridge financing, to negotiate an extension of lead time or maturity with a supplier, or to finance a growth project, for example.
In the case of inventory financing, we mobilise new sources of financing from investors using structures based on a trust and/or a pledge with delivery.
To enhance the value of your equipment, we can work with you in the form of sale and leaseback if your equipment has been in existence for a long time, or leasing in the case of new equipment. It is often possible to mix new and existing assets within the same financing package.
We carry out an appraisal of your assets to find out which ones will reassure creditors the most because of their strategic nature for the company. Then, in addition to analysing the strategic tangible assets, we carry out a financial analysis. We then organise your financing with our network of investors to meet needs of up to €50 million or more.
Are you looking to increase the value of your assets and want an expert to help you make a success of your financing project? Chetwode has been specialising in industrial asset finance for nearly 20 years, for both inventory and equipment. Our team of experts can set up your financing project and manage it from start to finish: from analysing your assets, through creating the contract, to releasing the funds. We look forward to hearing from you if you have any questions about your financing.
