Businesses can require finance for a variety of reasons, including day-to-day running costs, expansion plans or the acquisition of certain assets. Talbots Law helps business owners understand the legal requirements regarding business financing, providing practical guidance throughout the process.
At Talbots Law, we understand that businesses often rely on external finance to help with a variety of business needs. This can take the form of a range of finance options, including term loans, invoice discounting, overdrafts and hire purchase agreements.
Why choose Talbots Law for advice on finance for your business?
If you are looking to put in place facilities for working capital requirements, you’re planning some significant expenditure or need funding for an acquisition, our Corporate & Commercial Team will be able to guide you through the legal complexities.
Our Corporate & Commercial Team regularly review the terms of loan agreements and security documents to make certain you understand the terms of the documentation you are being asked to enter into. Furthermore, we will check that the correct legal approvals are in place to ensure that directors comply with their directors’ duties.
We have advised on:
- term loans
- factoring/invoice finance;
- asset finance;
- hire purchase agreements;
- fixed and floating charges.
What is a secured loan facility?
A lender’s primary concern is that they will be repaid. If a borrower becomes insolvent, an unsecured lender will have to share the proceeds of the sale of the borrower’s available assets with other creditors and potentially only receive part of what it is owed as a result. Lenders, therefore, inevitably take security to protect themselves against this risk and increase the likelihood that they will be repaid. Where security is provided, the lender takes a charge over the security provider’s asset(s) giving it priority over other creditors in the event of the borrower’s insolvency.
What is Asset Finance?
Asset finance is a method of providing finance for the purchase of particular tangible movable assets. The structure of the financing used depends on the nature of the asset being purchased. A key feature of asset finance is that the asset itself which is being financed will be the primary security given to the lender. The revenue provided from the use of the asset will repay the debt and service interest payments.
There are two principal types of asset finance structure:
- secured lending, where the lender loans money to the purchaser to buy the asset and the lender in turn takes security over that asset; and
- leasing/hire purchase, which is extremely common and can offer greater flexibility.
To talk to us further about how we can help with your legal requirements in relation to financing your business, please call our office today on 0800 118 1500.
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