Asset Financing in Kenya
Nowadays, most companies opt for asset financing to get funds to solve various financial difficulties. These loans are often secured with the company’s assets, such as machinery and equipment, unless the full amount is reimbursed. This financing accompanies interest rates and specific repayment periods for individual companies. With different asset financing companies in Kenya, some offer the best rates and repayment plans for those looking for secured loans.
Asset financing has become a common trend for most companies to get fast financial support when faced with funding intricacies. But, familiarizing with asset financing meaning and what it entails come in handy before applying for your first credit. This guide provides insights on asset finance to help companies apply successfully.
Asset Financing Explained
Asset financing is a form of borrowing based on a company’s assets. Companies looking for fixed asset financing often use current inventories, short-term investments, and receivables to get lenders’ loans. Among the lenders is Mwananchi Credit Limited that offers asset financing to different companies in Kenya. In this type of financing, funds granted are utilized in two ways;
First, the company can use the funding to procure assets such as machinery, equipment, and property over a given period while making partial payments. Second, a company can use assets as collateral to secure a loan with the amount provided determined by the assets’ value. Notably, these are practical approaches to asset financing during the disbursement of funds.
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Several asset financing companies in Kenya offer hire purchase loans that include buying an asset on behalf of the borrower until costs and interest rates are paid in full. The asset, either land, property, or equipment, remains under the ownership of the lender. After the final reimbursement is paid, the asset’s ownership is transferred to the borrower.
Property, account receivables, and vehicles are assets a company can use as collateral to secure loans through asset refinance. This form of asset finance rarely focuses on the business creditworthiness but rather on the pledged assets. The loan amount often depends on loan security.
Equipment, Operating and Finance Lease
Lenders can use leases to help companies remain functional in various ways. Equipment lease involves the borrower entering a contractual agreement to use an asset for a specific period. Payments are made during the period until the end of the approved timeframe. Afterward, the company can opt to extend the lease, upgrade, buy, or return the equipment.
Operating lease is similar to equipment lease but incorporates a shorter period and cheaper hence essential for businesses looking for short-term use of assets. Finance leases involve the company taking rights and responsibilities of ownership to secure assets. Throughout the period, the borrower maintains and preserves the asset. Intrinsically, this ensures there is 100 asset financing in Kenya for all companies in need of funding.
Requirements for Asset Financing at Mwananchi Credit Limited
- Six months and certified bank statement
- KRA and ID copy of the applicant
- Passport photos
- Sale agreement
- Proforma invoice
Asset Financing Loan Calculator
Typically, asset finance involves loan amounts that solely depend on the creditworthiness of the asset provided by a given company. Yet, determining the interest rates and repayment period of any given asset financing Sacco’s in Kenya is based on the granted amounts. A borrower can determine the total loan amount to be paid by providing the rates and the repayment period. These values are calculated to determine monthly installments in a given period.
Asset financing comes in handy for several companies facing financing problems, both in funding and seeking equipment to operate. With Mwananchi Credit Limited, different companies and individuals get asset financing and feel comfortable when securing secured loans. You can now apply for loan– choose Mwananchi car or boda boda financing today and get an approval within 6 hours.
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