Better than a Loan

Some one once said to me the cheapest money is always your own.

That’s fine and correct but what if you have business plans which your cash resources do not meet or you simply want to keep your options open, what is available then?

Traditionally the first port of call would have been the bank you have the business or private bank account with, they know your accounts history and will be able to make an offer providing the business plan justifies the investment and they have enough security.

lternatively you could approach another bank, however the application process will be much longer as they need to know your business and know you as an individual by requesting various forms of identity etc. They may be able to provide better rates but this is unlikely.

The problem with bank loan funding is how much do you ask for. A term loan for 5 years is a long time in business and in that time your requirements will have changed both up and down. A term loan is not flexible and the process of increasing the facility incurs additional costs and additional security provisions. Terms loans work for capital purchases such buildings and Licences and do not work for working capital needs.

Modern businesses need a more flexible approach to working capital finance. Invoice Finance and Factoring Finance are provided in a different way. An Invoice Finance facility is agreed at the start as a percentage of the gross debtor book so as the debtor book grows so the facility grows with it. There are no annual renewal fees and the security is the debtor book itself so the directors only provide a limited personal guarantee to alleviate fraud.

The costs of Invoice Finance or Factoring Finance can work out less than a term loan and with the advantage of flexibility of cash availability is the obvious choice for working capital finance.

Call us now for a quote and get your cash flowing again.