- 12 Jul
"Please increase overdraft" - it sounds like a desperate plea to your bank manager!
Limitations Of Overdraft
Many UK businesses use this kind of traditional bank finance, our high growth business research found fast growth businesses relying on loans (43%) and overdrafts (31%). We also found that 44% of startups that used loans or overdraft told us that they had less funding than they needed for their business.
The British Banking Association figures published 30th June 2017, showed 2 out of 10 SME applications being turned down by banks, that's 20% that don't get approved for the funding that they applied for. Their figures also reported the aggregate of approved loan and overdraft facilities being 13% lower than the same quarter the previous year - not good for liquidity in an economy that is growing, albeit slowly.
The Invoice Finance Option
There are forms of alternative finance to traditional overdrafts (OD) or loans, invoice finance is one of the options. It is a little known option, with 1 in 3 eligible businesses telling our recent survey that they were not aware of the option.
Perhaps you are already at your maximum overdraft limit, or are worried about what happens if you go over your overdraft? Our research has indicated that far greater levels of funding can often be achieved through the use of invoice finance compared to overdraft, perhaps around 16 times higher in some cases. In addition, you can often have invoice finance (IF) alongside your overdraft, even if they are with different finance providers. Alternatively, in many cases that we deal with, the IF repays all, or part of the OD and releases further cash on top of what you had previously. You will also be spreading your risk by having multiple sources of finance, rather than having all your eggs in one basket.
Finance With Poor Credit History
Many people do not even bother applying for finance as they fear that they will get turned down for it. We have lenders on our panel that will provide invoice finance, on the strength of your debtor book rather than your balance sheet (like bank funding) or your personal worth. Even with prior adverse credit history we are most likely to be able to help you, including CCJs, existing CVAs or even prior bankruptcy.
Increase Overdraft Or Alternative Finance?
So rather than having to ask your bank manager "can I increase my overdraft limit?" you might be interested in looking at an alternative finance option that is not based on your financial strength, but the strength of your customers and the collectability of your invoices, which is likely to be able to release even more cash to fund your growth.
- 10 Apr
Card Payment Advances From Nucleus Commercial Finance
We have just had some new literature through from Nucleus Commercial Finance regarding their Business Cash Advance product, BCA.We have previously documented their BCA offering, but below are the key details once again.The card payment advance is available to companies that take payments via a card machine. You can borrow up to 120% of your total monthly card payments, up to a maximum of...
- 05 Mar
Topping Up Invoice Finance With A Business Loan
We have had some interesting situations recently where customers are growing so fast that their need for working capital is actually outstripping the funding released by their invoice finance facility. It is great to have such potential trading volumes, but it brings with it a struggle to ensure that your cash flow can cope with the level of funding required.When a business is going through a...
- 21 Feb
Need A 100K Business Loan?
What could you do with a cash injection of £100,000 into your business?That is exaclty the kind of business loans that we have recently secured for clients, and that level of funding is far more available than you might think.You could use that money within your business for almost any purpose that you wish.£100K is a lot of money, and you could put it to good use within your company. Some of...
- 16 Feb
How Business Loans Compare Between Lenders
I had an interesting request recently, one of my contacts wanted my input regarding how a new business loan company was likely to fit into the marketplace, and what the existing market space was like. It prompted me to jot down a few points about business loans that others might find useful.There does seem to be a growing demand for business loans at present. We have a number in the pipeline...
- 08 Nov
Business Cash Advance Against PDQ Machine Receipts
If your company takes card payments you could receive an unsecured loan that is repaid as a percentage of your future receipts through your PDQ machine (Process Data Quickly). This product has just been launched by one of our funding panel and is called Business Cash Advance (BCA).This type of cash advance against your PDQ card payments could be made available to:You can use the money that you...
- 07 Nov
Advances Against Government Funding Instalments With Education Finance
Education finance provides advances against your government funding instalments so that you don't have to wait to get paid before you make expenditure. You can use those funds immediately boosting your working capital position and ironing out the lumpy nature of cash flow in the education sector.Waiting for the Government to pay your funding instalments can cause cash flow pressures for...
- 21 Sep
Nucleus Commercial Finance Lowers Unsecured Loan Rates
Business loan rates from just 7%.We have just been advised that Nucleus Commercial Finance have lowered their unsecured business loan rates. Their interest rates now start from a 7% flat rate, to borrow up to £100K with no additional security, just a personal guarantee.The loan rate is determined according to the credit status of your company, and the term of the loan that you require. The...