In what form can a business invest in fixed assets?

In addition to investing in labor, investing in fixed assets also plays an extremely important role in the operation of a business. They greatly affect productivity and business efficiency. So how can businesses invest in fixed assets? Let's find out with SeABank in the article in the News section below!

What is fixed asset investment?

Fixed assets play an important role in the production and business activities of enterprises. To better understand this type of investment, we first need to clarify the concept of fixed assets and its role in production and business activities.

What are fixed assets?

Fixed assets are a familiar concept in the business field. For an asset to be classified as a fixed asset, it must satisfy all three of the following criteria:

• Has cash conversion value of 30 million VND or more.
• Has a shelf life of over 1 year.
• It is certain that future economic benefits will be derived from the asset.

According to Circular 45/2013/TT-BTC, fixed assets of an enterprise include:

• Tangible fixed assets: Assets with a specific physical form, which can participate in the business process of an enterprise while still maintaining their original physical state such as: houses, architecture; machinery, equipment; means of transport or transmission equipment; tools, management equipment, gardens, etc.
• Intangible fixed assets: Assets that cannot be expressed in physical form but are expressed through the amount of value that has been invested and can participate in the business process of an enterprise such as inventions, copyrights, patents, land use right certificates, etc.

Illustration of fixed assets

Fixed assets play an extremely important role in the operation of a business, and are considered as means of labor. Fixed assets help workers to exploit, produce and create more products and better services to improve productivity and increase revenue for the business.

Therefore, the more businesses know how to take advantage of improving, innovating or investing in fixed assets effectively, the more benefits they will receive.

What is fixed asset investment?

Fixed asset investment is the act of a business investing in its fixed assets with the aim of improving work efficiency to increase material wealth or using those fixed assets to carry out other business investment activities.

Knowing how to invest in fixed assets effectively will help businesses increase revenue.

How do businesses invest in fixed assets?

Currently, there are 2 popular forms of fixed asset investment commonly applied by businesses:

Investment in construction, upgrading and repair of fixed assets

DInvesting in construction, upgrading and repairing fixed assets is the activity that a business carries out to increase the value and extend the life of fixed assets, including activities such as:

• New construction investment: The business building facilities, purchasing equipment, expanding business facilities.
• Fixed asset repair: The maintenance or replacement of damage to restore the original function and operating state of fixed assets.
• Fixed asset upgrade: The activity of renovation, construction, addition to improve the quality, capacity or extend the usage time of fixed assets.

Investing in fixed assets is a basic condition for a business to operate smoothly.

The source of capital for enterprises to carry out fixed asset investment activities can be their own capital, capital mobilized from other sources of the enterprise or borrowed capital. Most enterprises use loans from commercial banks to carry out investment activities thanks to the attractive incentives offered by the bank.

SeABank is one of the commercial banks that always creates favorable conditions for businesses, providing many useful loan products with attractive preferential interest rates so that businesses have more capital to carry out business activities.

Using fixed assets as an investment

In addition to investing and upgrading fixed assets, many businesses now also useFixed assets as an investment to raise additional capital for business operations. Fixed assets are often used as collateral for businesses to borrow capital from banks.

Businesses can also use fixed assets as an investment.

This is the form that many businesses prioritize and use because it brings many benefits such as:

• A useful solution for small and medium-sized businesses with limited budgets.
• Help businesses free up working capital, which can be used for business operations.
• No need for additional assets to secure the loan, avoiding many cumbersome procedures.

SeABank's products support businesses in investing in fixed assets

With the desire to accompany businesses to overcome all difficulties and develop sustainably, SeABank constantly provides comprehensive financial solutions, including fixed asset/project investment loan products.

SeABank always supports fixed asset investment activities for businesses.

Understanding the importance of investing in fixed assets in the process of expanding and improving production and business capacity, SeABank supports businesses in paying for fixed asset investment costs/projects such as: purchasing, installing, constructing, repairing machinery and equipment/production lines, means of transport/construction vehicles, offices/factories/warehouses, lending to implement investment projects... to serve production and business activities.

Vis Investing in fixed assets at SeABank is also a priority choice for many businesses because it has many outstanding advantages such as:

Loan limit: Up to 80% of total fixed asset/project investment cost.

Loan term:

• For fixed asset investment: Maximum 120 months.
• For project investment: Maximum not exceeding the project's operating period.

Grace period: Maximum 24 months.

Collateral: Accept a wide range of collateral, including loan-to-value (LTV) ratiosfor secured assets such as machinery/production lines up to 70%Competitive loan interest rates, with many incentives from time to time.

Above is information about SeABank's fixed asset investment loan product, a very useful solution for businesses. For more detailed and specific advice on the product, please visit the website or contact Hotline 1900.599.952.