Four 'soft assets' you didn't know you could use asset finance to buy

POSTED: 13th June 2014
IN: Guides

Since the financial crash of 2008, it has become more difficult for small businesses to access funding. Although the economy appears to be on the up, the affordability of essential pieces of equipment still weighs heavy on business-owners minds.

This is particularly true of ‘soft assets’. Everyday business-critical items with a low intrinsic open market resale value, including things like IT equipment and furniture, are all fundamental to success, but nonetheless tricky to secure.

One thing that has made assets more affordable for small businesses is alternative funding. Burgeoning finance solutions like asset and invoice finance have freed up finance for small businesses, allowing them to make savvy investments for growth.

So what do we mean by soft assets and what kind of equipment is it becoming easier to secure with alternative funding?

1.     IT & Communications equipment

Technology evolves at a rapid rate these days, and for that reason it’s really imperative for businesses to embrace modern tools to be in a position to compete effectively.

In a survey carried out by Node4, 250 IT decision makers indicated that one in 10 SMEs expect their IT budget to grow by more than 10 per cent next year, whilst only 5 per cent anticipate a cut. This is unsurprising given that studies have found that PCs older than three years old are responsible for approximately 40 per cent more downtime that a newer machine.

Paul Bryce, business development director at Node4 surmised:

“IT managers and directors are even more savvy than before. All those with purchasing responsibility today want an IT solution that helps them to win more business, beat the competition and prosper in the growing economy.”

2.     Security equipment

Theft and vandalism crimes targeted at business premises are, unfortunately, quite common. Government research revealed that based on interviews with 4,017 respondents, 9.2 million crimes were encountered by UK businesses in 2012 alone.

Security equipment is important, particularly for retail businesses, which are especially prone to theft. In fact, retail businesses were the victim of some 84 per cent of crimes recorded in 2012, largely as a result of the multitude of shoplifting offences committed.

An investment in security equipment could end up saving small businesses a huge amount of time and money in deterring criminal behaviour – and could also come in handy in the instance of insurance claims too.

3.     Furniture & fittings

There are a number of reasons why a business may need to invest in office furniture, from team expansion to reinventing the work space. This can sometimes seem like an arbitrary investment, but keeping a smart, uncluttered office space can reap huge rewards in the long-run from maintaining employee morale to impressing clients. 

4.     Software

Last but not least, the right software can form the backbone of a small business. This doesn’t just refer to specialist software, either. Whilst dedicated HR or sales support software can greatly improve business efficiency and productivity, just having the fundamentals can be challenge enough.

Small businesses are continually at the mercy of software updates.  To illustrate, at the time that Microsoft announced it would be retiring the 13 year-old Windows XP, one third of the world’s computers were still running it. The UK government was so concerned about the impact of this on small businesses that it decided to pay Microsoft £5.5m to extend support for departmental computers for a further 12 months.

In short, having up to date software is essential – but expensive. For small businesses that don’t just have the means to buy this software outright, the extension of asset finance to these ‘soft assets’ could be a lifeline.

Aldermore Bank is a leading provider of alternative funding for the UK’s SME community. For more help or information about financing for soft assets, don’t hesitate to get in touch to speak to one of the team.

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