In an era of increasing taxation and uncertain energy costs, improving efficiency and reducing operating costs are In an era of increasing taxation and uncertain energy costs, improving efficiency and reducing operating costs are a key focus for businesses
We have included below some useful guidance when considering using finance to make efficiency improvements at your business
Green Energy
Asset finance is a competitive mechanism to make improvements such as installing solar PV or battery energy storage systems (BESS) at your business premises. Some lenders offer discounted rates also known as ‘green rates’ to make this type of investment possible
Finance can be tailored to meet the payback period of the installation. The finance period offered by most lenders is up to 7 years, offering flexibility for low deposits and future cashflow needs
Implementing a battery energy storage system alongside Solar PV can provide significant advantages for businesses, particularly those operating outside of daylight hours. While businesses can sell excess energy back to the grid, the income generated from this often falls short of the costs incurred when purchasing energy from the grid during off-peak hours
Provided a green energy installer are reputable and MCS accredited, our experienced lending panel will be able to consider working with them
Plant Equipment and Goods Vehicles
Popular choices that we are seeing our customers make include upgrading their diesel forklift trucks to lithium-ion versions, to considerably reduce maintenance outgoings and improve their working conditions
And as clean air zones spread out to towns and cities across the country, having a non-compliant goods vehicle is becoming more costly. Buying a more efficient vehicle such as an EU6 compliant vehicle can help your business to stay competitive and cut back on running costs
Pairing upgrades with a suitable finance solution can improve the quality of asset your business is able to purchase and subsequently it’s life within your business
When you find a suitable asset for your company, we can help you finance this competitively
Electric and Hybrid Cars
A popular choice for directors and company owners, as Benefit in Kind (BIK) Tax Relief currently favours electric and hybrid vehicles. These vehicles are often just as practical and running costs are less than their petrol or diesel equivalent
Whether you want to purchase this outright or consider a leasing solution, we have finance solutions ready to assist your business
Choosing Your Vehicle
When shopping for your vehicle, three things to consider when using finance are:
- You can purchase a vehicle from any reputable supplier in the UK
- Vehicles are typically financeable until their 10th birthday
- To have less than 100,000 miles currently
Finance Options
- Spreading the cost for up to 7 years, allows a business to meet the earning potential of the asset investment with future budget requirements
- Common fixed interest rate agreements provide certainty of the monthly payment for the entire finance period. Another option, a variable rate solution, are popular for businesses who seek the benefit of future interest rate reductions and offer more flexibility when settling early
- Where cashflow is seasonal, tailored payments can be made to suit, particularly useful in industries such as hospitality and farming
- For VAT-registered businesses, VAT deferrals are a useful tool to process the VAT reclaim before paying onto the lender up to 4 months later, removing cashflow pressure
Tax Benefits
Alongside other capital allowances including the Annual Investment Allowance, You can claim ‘enhanced capital allowances’ (a type of 100% first-year allowance) for new and unused:
- electric cars and cars with zero CO2 emissions
- plant and machinery for gas refuelling stations
- zero-emission goods vehicles
- equipment for electric vehicle charging points
- plant and machinery for use in a special tax site in UK Freeports or Investment Zones, if you’re a company
Interested in finding out more?
Through our qualified experience and an established lending panel, we help businesses obtain the funding required to grow
To explore the finance solutions available to your business for efficiency improvements, please contact us today
