Asset Finance

Lease finance has penetrated all sectors of manufacturing, printing and service businesses to the extent that it is now commonplace for few, if any, items of plant and equipment to be owned outright by a company.

Equally, while most businesses would have relationships with a single clearing bank and/or invoice discounter, leasing is most often spread between several providers. The reason for this is both the transactional nature of leasing and the desire of both finance parties to spread funding and risk.

At the point where either management, or most often the bank, may instruct an Insolvency Practitioner to undertake Solvency Reviews or Independent Business Reviews there is often the need accurately and quickly to assess the potential for forbearance by lease creditors.  This will combine the established expertise of Lambert Smith Hampton's Machinery and Business Assets team to identify the value of leased assets with the skills of our Asset Finance division.

Typically the lessors will fall into three broad categories which will dictate their willingness to consider forbearance to support a business when no additional security is available:

Lessors with comparatively low exposures

An exposure deemed small to a major lease provider may be highly significant to a smaller house but either way there is a point below which it becomes counter productive to seek support. For example the house funding the franking machine would not expect to be drawn into a moratorium with the owner of a new 10 colour printing press.

Lessors with poor asset security

Commonly the lessors who were last to lend to a business but including those with most to lose in the event of a business failure. This category should be the most willing to assist though some lessors might consider themselves well secured when in truth this is not the case.

Lessors with good asset security

Commonly the lessors who stopped lending a considerable time before problems become apparent and have no relationship to preserve or specialist high risk lenders who have taken ample asset security. This is the group least likely to agree forbearance unless and with persistence it can be demonstrated that their security cover will not be reduced.

The Machinery and Business Assets Division of Lambert Smith Hampton has the expertise to fully analyse the leased assets held by a business.  Further, we can recommend strategies to maximise the chances of a successful turnaround having taken account of the subtleties above. If required so to do we will approach providers of lease finance at the appropriate level or lead requests for support to a group of lessors. We have long experience in this field and the ability to quickly assess or compose a presentation to equipment lessors.

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