Business Assets Defined: Fixed, Soft, And Intangible

February 22, 2018 by CNH Finance, LP in category “Financing”

For new entrepreneurs, the term “business assets” gets thrown around quite a bit. Banks and private lenders alike will often ask for a list of assets when new business owners are applying for financing. Certain assets can be used as collateral. Some assets can be leveraged for lines of credit. Others are only relevant when claiming tax deductions. At CNH Finance, we have put together an easy to follow guide on the difference between fixed, soft, and intangible assets.

Fixed Business Assets

Fixed business assets can span the gamut of equipment, vehicles, real estate, inventory, receivables, and more. The defining feature of all fixed assets is that they are all owned by the business. For instance, businesses may purchase equipment and facilities. Products made by a business or those purchased for resale are considered fixed business assets. Receivables are also fixed assets because they account for revenue, which is owned by the business. Fixed assets are not borrowed or leased from other entities. Fixed assets can also be leveraged for revolving lines of credit. Asset based credit does not place any debt on the books, which means new business owners do not have to rely on bank loans for working capital.

Soft Business Assets

Soft business assets are items used by a business, but not purchased. Office space and facilities which are rented, for example, are soft assets. Equipment and vehicles which are leased are considered soft assets. The benefit of soft assets is that all payments made to lessors can be claimed as tax deductions. The IRS Tax Code, under Section 179, provides for deductions on leased items used for business up to a limit of $500,000. Entrepreneurs can recoup quite a bit each year if they carefully deduct soft assets and provide the supporting documentation.

Intangible Business Assets

Intangible business assets fall into a bit of a gray area, hence the term. Intangible assets include things such as copyrights, tangents, and intellectual property. With rare exception, the advantages of intangible assets often come with generating revenue through proprietary systems, services, and products. Quite often, intangible assets are established to carve out a stronger foothold in the marketplace and set businesses apart from other competitors in the same industry.

CNH Finance provides financing by tapping into the hidden value of fixed business assets. Our team will perform an in-depth analysis of your fixed assets to create a revolving line of credit. Contact our offices to learn more.

Image for 'Business Buyouts: Getting A Boost In Working Capital'
Business Buyouts: Getting A Boost In Working Capital

Busing buyouts are complex, and need to be handled carefully and efficiently. Both liabilities and assets must be analyzed to see what should be kept, what needs to be released or sold…

Image for 'ABL Credit: What The Banks Do Not Tell Entrepreneurs'
ABL Credit: What The Banks Do Not Tell Entrepreneurs

Business owners seek lines of credit in order to have an extra source of working capital on hand which can be used for a wide range of purchases and projects. Many times, business owners…

Image for 'Working Capital: Financing Sources Are Not All The Same'
Working Capital: Financing Sources Are Not All The Same

Working capital is essential to the success of every business. However, finding a reliable source of working capital can be a challenge unto itself. Many of the working capital solutions…

Image for 'Bethesda, MD Healthcare Centers: Finding Working Capital'
Bethesda, MD Healthcare Centers: Finding Working Capital

Bethesda, BD healthcare centers often face challenges when trying obtain and maintain an adequate source of working capital. Far too often, banks have high requirements, and the time it…

CNH Finance
24 East Ave #1285
New Canaan, CT 06840
Phone: (203) 266-3210

Business Development
Long Beach, CA 90803
Phone: (562) 833-7815

Business Development
3334 E. Coast Hwy, Suite 541
Newport Beach, CA 92625
Phone: (714) 520-1788

Melinda Ficek

Maryland Office
3 Bethesda Metro Center, Suite 723
Bethesda, MD 20814
Phone: (301) 529-9993

Steve Silver

Business Development
5050 Quorum Drive, Suite 700
Dallas, TX 75254
Phone: (972) 687-9157

Rossi Felix