Taking the decision to make a capital investment will be, for many laboratory owners, one of the biggest business decisions they will make. This is especially true at the start-up phase, but it is just the beginning of what can be an exciting yet potentially bewildering journey through the sea of finance options available to business owners.
At Braemar Finance, our job is to help you better understand how to fund those capital investments efficiently, and we have a long history in doing so. Founded in 1992, now in our 25th year, we quickly grew to become one of the premier providers of finance for the professions in the UK.
We’re a specialist lender that offers tailor-made finance solutions designed to help with the growth and development of individual businesses, working in partnership with our customers to alleviate many of the day-today issues they face. We’re a company that is known in the industry for its customer service and commitment to long-term relationships. We have, for many years, provided bespoke finance to both independent dental corporate dental businesses, with assets ranging from specialist equipment and vehicles to IT hardware and software.
At Braemar Finance, we specialise in asset finance, a flexible funding solution that gives your business access to the equipment, vehicles and IT technology it needs to operate without compromising cash flow. It can be used for both new and second-hand assets, or as a method of releasing value from those you already own.
Taking out finance is actually one of the most responsible things a business can do because it means they can fund improvements to secure the future of their business in a sustainable way over an agreed term without having to empty the cash reserves.
There are three main products commonly used and which make up the base for all the other named products in the market today – hire purchase, leasing and refinancing. Some businesses may, though, decide they are cash rich and prefer to use their own funds. As with all approaches, there are both benefits and downfalls to doing this.
To buy equipment outright may seem like a good option because you benefit from fully owning the asset, can claim capital allowances, have not tied your business into a finance agreement and may have paid less in the long run. You need to also consider the potential impact on your cash flow. Will you now need to use an overdraft? Business cash flow cannot be predicted – what if you need cash for an emergency? Then there is maintenance and depreciation of the equipment and what if the equipment is not really right for you?
Hire purchase allows outright ownership of the asset and enables you to spread the cost over a term that suits your business. Benefits include: • Expenditure may be allowable against taxable profit within your Annual Investment Allowance in the year of purchase to the sum of £200,000 • Interest charges can be offset against profits for taxation
Qualifying assets fall under capital expenditure and qualifiy for Annual Investment Allowance which allows tax relief against taxable profits on the full purchase price, including VAT. The Annual Investment Allowance has an upper limit of £200,000 per financial year, with the full tax relief received in the year items are purchased rather than over David Foster is managing director of Braemar Finance. Working in professions finance since 1984, David was a founding partner of the company, which grew quickly establishing a firm foothold as one of the premier providers of finance for the professions in the UK. Close Brothers Group plc acquired Braemar Finance in the year 2000 and David has continued to help grow the business.
several years, thereby assisting cashflow. This tax benefit is designed to help businesses plan their spending on longer term investments and business owners are encouraged to consider taking advantage of this level of tax relief.
If you want to maximise the use of your equipment without the responsibility of owning it, leasing will give you the freedom and flexibility you need. The main benefits of this are:
Refinancing allows you to release equity from equipment or assets you already own. This has proven to be a very popular and quick way to access the value of assets on a business’s existing balance sheet and redeploy that value elsewhere in a business. Business owners like this option because:
Braemar Finance highly recommends that you talk to a sector finance specialist enabling them to suggest the most tax efficient funding option that suits your individual circumstances. A specialist will be able to recommend the best option for you and where necessary will liaise with your accountant to ensure that you receive the most efficient funding solution available to permit you to acquire the equipment you desire.
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