How Your Existing Business Assets and Property Can Fund Growth

Every business owner knows that having cash on hand is crucial, but many don't realise the financial power that already exists within their business's assets and property. At Finance Link, we regularly see successful New Zealand businesses with significant, unused value on their books. This can mean they're missing out on opportunities for growth, improving cash flow, or strengthening their financial position. This isn't about taking on more debt; it's about being smarter with the capital you already have.

Seeing the Value You Already Have

For a long time, we've thought of asset finance as a way to buy new machinery or vehicles, and property finance as a way to buy commercial premises. While those uses are fundamental, they are only a part of the story.

In today's economy, businesses need to be adaptable, invest in new ideas, and manage their cash flow effectively. Your balance sheet is a tool for your future, not a record of the past. The key is to unlock the capital tied up in your existing assets and property.

Smart Uses for Your Assets

Imagine a growing manufacturing company with a five-year-old vehicle fleet. One option is to simply keep using them until they need to be replaced. A more strategic approach could be:

• Refinancing existing assets: If you own valuable assets outright or have paid down a significant portion of their loans, you can refinance them. This frees up a large amount of cash that you can use for working funds, entering new markets, or even acquiring another business.
• Sale and leaseback: For high-value assets you own completely, like specialised machinery, a sale and leaseback can be a powerful option. Your business sells the asset to a finance provider and then leases it back. This immediately puts a substantial amount of cash into your business, while you continue to use the asset without interruption. It’s a clever way to generate capital without taking on new debt.
• Funding upgrades: In a world of rapid technological change, staying competitive often means investing in the latest equipment. Asset finance can be set up to allow for more frequent, cost-effective upgrades, keeping your operations modern without a huge upfront cost.

• How Your Property Can Work Harder for Your Business

• Property, both commercial and residential, often holds significant value for business owners. It can be a strong financial tool beyond a standard mortgage.
• Capital from commercial property: If your business owns its premises, refinancing the property can release equity, giving you a big cash injection. This can be used for expansion, consolidating other debt, or diversifying your investments.
• Using residential equity for business growth: For many SME owners, their personal home has considerable equity. We can help you structure a facility around this equity to provide capital for business growth or significant projects. We assist our partners in finding a good balance, as it can generate significant opportunities when managed with care.

Why Review Your Capital Structure Now?

Looking at your asset and property finance is about being proactive with your business finances, not just a quick fix.

• Optimise cash flow: Ensure your business has enough cash for day-to-day operations and to jump on new opportunities.
• Improve your balance sheet: Strategic refinancing or a sale-and-leaseback can improve key financial ratios and your creditworthiness.
• Support growth goals: Accessing existing capital gives you the resources for mergers, acquisitions, or market expansion.
• Diversify funding sources: Relying only on a bank overdraft can be limiting. Exploring asset and property-backed solutions gives you a broader mix of funding options.

At Finance Link, our expertise is in finding these often-overlooked opportunities within your business. We work with the leading banks and financial institutions to create solutions that fit your long-term goals. We want to make sure your assets are working for your business's success, in ways you might not have considered before.