An Overview of Asset Finance and Its Various Types

September 4th, 2010 admin

An Overview of Asset Finance and Its Various Types

Asset finance allows companies to collect funds for the purchase of assets they might need to make their businesses run successfully. At times, paying a huge amount of cash at one time for buying assets can be really hard to manage. Moreover it would significantly affect the company’s working capital. With asset finance one can raise the capital to buy assets and the money can be returned to the finance company through regular payments over an agreed period of time.

Asset finance can be used for purchasing new and used cars, coaches, light and heavy commercial vehicles, plant machinery and office equipment. With the help of asset finance solutions, you can buy equipment for your business without spending a large sum in one go.

In other words, it saves you from the trouble of arranging a large amount of capital for buying much needed assets.

Major Types of Asset Finance Available in the UK

Hire Purchase

This typical credit facility is readily available where the financier allows the hirer the right to possess and use an asset in return for regular payments. Here, the hirer first finds the asset he wants and negotiates the purchase price with the supplier.

After the hirer pays a deposit of 10-20% to the finance company, he can take the asset directly from the supplier. After a balloon payment is made at the end of the term, the title of the goods is transferred to the hirer.

Lease Purchase

Lease Purchase is often confused as a regular lease. It is similar to a hire purchase agreement with the only difference being that in a Lease Purchase the hirer needs to pay a deposit of 10-15% as a multiple of the repayments. The payment for the remaining balance and interest is done in instalments.

Moreover, a Lease Purchase agreement is based on either a fixed or variable rate. The monthly instalment can be reduced by the inclusion of a balloon.

Contract Hire

In Contract Hire, a rental agreement is made between the supplier and the customer. Here the customer hires the asset for a fixed period of time and after the completion of the period, he returns the asset to the supplying dealer. With contract hire, the customer gets the chance to use the new asset without the risks associated with ownership.

Finance Lease

With finance lease, one can get up to 100% finance for the acquisition of plant equipment required in a business. Here, the ownership of the goods remains with the finance company which rents the goods to the hirer over a predetermined period. Initially, the hirer needs to pay the documentation fee and an initial payment of a multiple of rentals. The remaining cost of the asset is paid back over the agreed time period.

Operating Lease

Here an agreement is made to rent the asset for business purposes for a predetermined period. At the expiry of the agreed lease, the asset is either returned to the financier or an offer to purchase it for a mutually agreed price is made. One major line of difference between an operating lease and a finance lease is that the primary rental period for an operating lease does not cover all the capital costs and the hire charges.

Looking at these various types of asset finance, it would not be tough to choose one for buying expensive equipment without forking out a huge sum of money at one go. But it is essential to understand asset finance and its various types properly before applying for it.

There are many finance companies that can help one to get competitive and tailored asset financial solutions to suit one’s personal and business requirements. It is advisable to take professional help to avoid any sort of complications in the future. One can take help from any reputed asset finance based consulting company to get a better deal for one’s business.

Mark brown is working as a consultant in a reputed asset based financing company in the UK. As an amateur writer he writes on business and finance with special reference to asset finance and its various segments.

Glasnua: Powerline Bpl Smart Grid Technology Adding Intelligence to Power Utility Networks

September 4th, 2010 admin

Glasnua: Powerline Bpl Smart Grid Technology Adding Intelligence to Power Utility Networks

Former European cable execs see BPL parallels

Tom Walsh and Patricia McGrath were executives at UPC Broadband — now owned by Liberty Global. The Netherlands-based firm grew from a 200-user cable modem trial network in Amsterdam in the mid 90s to a customer base of over 1.5 million cable broadband subscribers in 14 countries in 2002. Walsh was vice president of engineering and then operations and McGrath was vice president of network planning and implementation.

The two left UPC and in 2005 they started Glasnua Ltd. in Ireland. They looked at various alternative technologies and soon found BPL. Glasnua, are convinced BPL is the technology it had been looking for and set its sights on deploying BPL for utility services and retail triple play throughout Europe .

Walsh and McGrath spoke to us Thursday from their headquarters in County Kerry in Southwest Ireland .Walsh is CTO and McGrath is director.“ Europe will offer incredible opportunity for ‘smart grid’ technology players for the next 10 years,” said Walsh. He believes the key for BPL technology firms to succeed in Europe will be to maintain a presence without draining resources and funds.

www.glasnua.com is set up to help. The firm’s been trying to land BPL projects with utilities but like everywhere, European utilities have resisted.

EU’s pushing BPL

“Utilities have been slow to come to the table so far — but here in Europe the EU is actively pushing the technology,” said Walsh. Why is the government of Europe pushing BPL?

A BPL initiative is underway to “overcome the energy challenges presented by a rapidly expanding [EU] membership where demand is outstripping supply,” Walsh reported. He and McGrath are involved in that government effort and they’re confident “it will happen,” she added. The firm wants to introduce to Europe some of the main players in the BPL world “that have existing and proven technologies and proven business cases so that we can jump start some technology trials.

“We believe that some of the strongest players have a great opportunity to be in at the beginning” — with a real possibility to turn those trials into commercial deployments.

Glasnua hopes to avoid “open-ended science experiments — that I think have been some people’s experience in the past,” said McGrath. Some of the utilities in the EU are trying to “reinvent the wheel,” she added — and Glasnua wants to show them wheels are “already out there,” she added.

The challenge for Glasnua is to make deals with international BPL technology firms including US firms and represent them in Europe.

The name says it all

Glasnua learned early that utilities aren’t usually interested in hype about the broadband business. True to its name, the firm is focused on utility applications and sees that market offering huge potential. Commercial broadband is a side benefit that can be delivered by firms that lease bandwidth from the utility, he noted.

But the need for the 21st century smart grid is urgent. The EU grew from 15 to 27 countries in the last 3 years, Walsh reminded. Many have rapidly growing economies that are putting incredible demand on power grids.

These states have limited raw resources for energy production and a lack of organization in the power interconnection between countries. The EU doesn’t have a system to manage the grid or know “who’s producing power” and who’s using it.

“Smart grid efficiency and control are finally being seen as the way to integrate and manage the various networks” — and cut reliance on generators outside the Union, said Walsh.

Meanwhile less developed nations in the EU are trying to build their economies and getting access to broadband is a key ingredient. “Pilot projects are being planned to take the best existing solutions and test them for commercial roll-outs throughout Europe.”

Walsh expects BPL’s role to expand as green power generation projects such as home-based generation, solar panels, wind farms, tidal power and more start populating the grid. Interconnection with those projects will make managing the reliability of the grid ever more complicated — and some look to BPL as an obvious answer to managing that complexity.

They saw cable get smart

BPL reminds Walsh of the early days of cable. People in 1997 told him cable modem networks “couldn’t happen, it wouldn’t work — we were dreaming.” BPL is in roughly the same position as cable was then — with a lack of standards, some engineering challenges in creating networks plus it’s got its nay sayers.

The broadband boom in Europe was similar to “the wave that’s building for smart grids. ”Cable traditionally was a one-way, wire-based distribution network. Sounds familiar.

Cable modem technology introduced tremendous advantages by adding IP to those networks.

Suddenly the operator could see the condition of every piece of gear on the network all the way to the customer’s modem.

That gave Walsh a brand new kind of power in making financial decisions. He could make choices on where to spend money on the network — based not on which technology officer in field wrote the most compelling request, “but on actual live statistics,” he stressed.

His operational crews — that had only ever been reactive — could now act proactively based on real-time data and “before stuff breaks.” Walsh would set targets and key performance indicators for his managers and then “see how they were doing — not based on a score card but actual real statistics, real facts.” www.glasnua.com

QUOTE OF THE WEEK: All of a sudden you had huge efficiencies coming into the operation which means you gave better end-service to the customer. At the same time you were able to reduce costs of providing the service. This was all happening in the cable sector probably in the years of 2002, 2003. Take that benefit and combine it with BPL and you are making that business case look much rosier.

Tom Walsh, CTO, Glasnua

These folks have scaled

Another similarity with cable is the problem utilities face in scaling data networks to cover entire utility footprints. Those are the same problems Walsh tackled with cable-based broadband, he reminded.

It takes “business nerve” to wait for the opportunities to ripen — and then capital to take advantage of the moment when it’s right.

Superior technology will win out, he added. “For us, ‘smart grids’ is nothing new. www.glasnua.com/aboutus.html

“We deployed similar technology on communications networks and quickly realized the operational benefits when scaling is handled correctly.”

“The smart grids principle is not new. “It’s been [used] in the telecom sector for over four years and has revolutionized both technical and operational management.

“These benefits can now be realized by power utilities, too”

Tom Walsh is the former VP of Global IP Operations and Engineering for Europe’s biggest communications where he deployed cable smart grid solutions, broadband systems and networks throughout the EU, Latin America and Asia Pacific.

Economical and Affordable Green Automotive Technology

September 4th, 2010 admin

Economical and Affordable Green Automotive Technology

Although hybrid cars are the rage, and there are all kinds of alternative energy sources on the horizon, hybrids are cost prohibitive, usually ranging 00 to 00 more than the gas only version of that model. However, instead of changing fuel sources, some automotive companies have been using a new type of transmission to improve fuel economy, lower emissions, and actually make vehicles faster without adding to the sticker price.

These companies are using a continuously variable transmission (CVT) and instead of having set gear ratios (or gears), it constantly varies the gear ratios, as well as engine performance, so that they both operate at their most efficient level in any driving scenario.

Because these key components of the power train are at their peak performance at all times, fuel economy is improved by 6-8% and carbon dioxide emissions are reduced by 10%.

Although these figures may not sound impressive, the gas savings increase the highway mileage of most vehicles by 4 to 6 mpg, which adds up pretty quickly at /gallon.

The CVT’s potential for reducing emissions is also significant. As Carlos Ghosn, CEO of Nissan Motor Company, said, achieving his goal of selling one million CVT equipped vehicles by the end of 2007 will have “the same effect in terms of reducing CO2 emissions as selling 200,000 hybrid electric vehicles.”

Since there is no shifting between fixed gears, there is no ‘shift shock’ or jerking sensation, which makes them exceptionally smooth to drive. CVTs also do well in hilly terrain since there is no ‘gear hunting’ or bogging down on a hill, followed by a loud, violent downshift, which also contributes to its superior acceleration.

You may be wondering why this isn’t in every car if it is so great. Well, every year, more vehicles in the American market add CVTs as an option, though it has happened quietly, as many people are leery of new technology, especially in cars.

The CVT is actually quite old although it is new to American automobiles. The concept was developed by Leonardo DaVinci and was first patented in the late 1800’s for industrial applications. The CVT has been used in Asian and European vehicles since the 1950’s, but until recently CVTs could not handle the power that American drivers demand from their cars. However, CVTs have seen widespread use in snowmobiles and Formula 500 racing where they have a reputation for extending engine life and being much easier to rebuild than either a manual or automatic step transmission.

So where can you test drive a CVT-equipped vehicle? Well you can go to dealerships selling Ford, Dodge, Audi, or Mini-Cooper, to name a few, although a Nissan dealership may be the best place to go. In order to hit their goal of one million CVT sales in 2007, they have installed CVTs in nearly every sedan in their lineup, including the best selling Altima, Maxima, and economical Versa (as a side note, Nissan has also made side curtain airbags standard in these models, improving safety and reducing insurance costs).

Although you may not have the budget for a hybrid vehicle or cannot wait for that miracle fuel to hit the market, you can take it easy on the environment, as well as your checkbook, by checking out a few cars with a CVT.

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