Understanding Financing Options
Navigating through various financing options can significantly impact both your personal and business financial health. Oasis Capital provides a comprehensive guide to managing loans effectively, ensuring you choose the right financing path to meet your needs. Here’s a detailed look at different types of financing options available and how to manage them wisely.
1. Asset Financing
Asset financing involves using tangible assets as collateral to secure a loan. This type of financing is versatile, catering to both personal and business needs, and can cover up to 100% of the financing required under certain conditions.
Advantages of Asset Financing with Oasis Capital:
- Accessibility: More straightforward to obtain compared to traditional bank loans, making it an excellent option for those needing quick funding.
- Predictable Payments: Fixed payments facilitate easier budgeting and cash flow management.
- Stable Interest Rates: Most agreements feature fixed interest rates, providing predictability in financial planning.
- Secured Loan: The risk is limited to the asset used as collateral; failure to repay the loan results in the loss of the asset, not additional liabilities.
2. Auto Financing
Auto financing helps individuals acquire a vehicle without paying the full price upfront. This financial product is an alternative to making outright purchases and offers flexibility through various financing products.
Choosing Between Dealer and Bank Financing:
- Dealer Financing: Dealers often receive a commission for loans they facilitate, so it’s essential not to feel pressured into accepting unfavorable terms. Understanding their lender relationships and conditions is crucial.
- Bank or SACCO Financing: Direct financing through a bank or SACCO can provide clarity on the affordability of a vehicle. These institutions might offer more competitive interest rates due to their relationships with car dealers.
Regardless of the financing source, always conduct thorough research on customer reviews, interest rates, and terms before committing.
3. Mortgage Financing
Mortgage financing is used by individuals and companies to purchase real estate. This type of financing is secured by the property being purchased, which also serves as collateral.
Mortgage Options in Kenya:
- Term Length: Mortgages are categorized by their term lengths, which define the repayment period.
- Interest Rate Type: Rates can be fixed, providing predictable payments, or variable, adjusting with market conditions.
- Payment Structure: Understanding the payment structure is vital to ensure it fits within your financial capability.
4. Refinancing
Refinancing involves revising the terms of an existing loan to improve the borrower’s financial position. This could mean securing a lower interest rate, extending the loan term, or changing other key terms.
Common Loans for Refinancing:
- Mortgages
- Car Loans
- Student Loans
Refinancing can lead to substantial savings over time, especially if it aligns with improved market conditions or an improved credit score.
5. Debt & Equity Financing
When a company needs to raise capital, it has two primary options: debt financing and equity financing.
- Debt Financing: Involves borrowing money that must be repaid over time, typically with interest.
- Equity Financing: Involves selling a stake in the company in exchange for capital, diluting ownership but not incurring debt.
Choosing the Right Option:
- Debt Financing might be preferable for those who wish to retain full control over their business.
- Equity Financing is suitable for those who need significant capital without the pressure of immediate repayments.
Conclusion
At Oasis Capital, we are committed to helping you navigate the complex world of financial products. Whether you are looking to purchase a new car, buy a home, or expand your business, understanding and managing your financing options is crucial. We provide personalized advice and tailored financial products to ensure that your financing decisions propel you towards achieving your financial goals.
