In the current climate to seek out alternative methods of financing, the UK firms are increasingly inclined and there is no doubt about it.
This is due to the fact that from their preferred lender in 2017 just 4 out of 10 SMEs were able to secure funding. Also there was insufficient capital made available to them, claimed further 34% of SMEs.
Via ways such as asset financing, this has made funding vehicles increasingly popular. As in their droves businesses turn away from traditional lenders.
To access assets such as machinery, equipment and vehicles the asset financing helps the firms, while from the value of assets that you already own it can also be used to release cash. It is important that you avoid instances of asset fraud as well as tread carefully in order to use asset financing carefully and effectively.
Some ways to avoid Asset Financing Fraud
An estimated £190 billion is the fraud that cost the UK economy in 2017 alone. To this, the asset fraud was a key contributor. And to anyone seeking Corporate Asset or commercial Finance, it remained a key threat.
To help you lower this risk and leverage asset financing safely, here are the 3 steps while keeping fraud in mind.
Research Sellers Extensively
It can also be overlooked by startup ventures and inexperienced SMEs as this may be an obvious point. If you are to avoid potential fraud then it is crucial that you research the seller at length while you look to purchase an asset.
To achieve this, the platform such as Companies House and HPI which includes information of registered businesses, trading history and their accounts in detail can be used.
To research suppliers and their credentials, you can leverage credit referencing agencies, in the process by highlighting any previous issues that they have experienced.
Make sure that the Asset is fit for Purpose
The integrity of each individual asset must be guaranteed by you. Or in terms of money you may end up acquiring something that offers no value at all.
Appointing an accredited and independent expert having the expertise to make a full assessment in the relevant field might be worth it to achieve this. In question depending on the asset this can be an engineer or a mechanic. But reviewing its overall capacity and functionality is the important thing you must do.
For poor quality assets, while preventing you from securing funding, a big difference can be made with this small precaution.
When sharing your Personal Details you must Take Care
Against the machinations of potential thieves when protecting yourself there are a variety of general rules which can be applied, while in its own right asset fraud may be a threat.
Take care that over email any sensitive information or payment details should not be shared. For example, while dealing with potential sellers or new suppliers.
Over unsecured network in a public, you should avoid sharing data information or communicating in case you deal with more trusted suppliers. Platforms on which data could be intercepted must be stopped from using. As it will put you in the risk of being a fraud and you will be a victim of fraud.
For fraudsters some online and social marketing sites offer a wealth of opportunity, so you must protect yourself online. Make yourself more knowledgeable about different types of red flags and fraud that may affect your asset financing. Hence you must know what to look for.
You can also hire a strong risk and fraud management team to avoid fraud in asset financing.
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