We often talk about how ‘cashflow is king’ and how cashflow is the ‘lifeblood’ of a company. That’s because it’s true.
Without a fluid cashflow, businesses can plateau, with stunted growth and restricted opportunities. As we start a new year we all, as business owners and managers, need to ensure that prosperity and success is possible with a healthy cashflow.
Yet often, your cashflow can be caught up with your customers’ lack of payment; essentially you’re funding their growth because they are delaying payments to you.
Doesn’t sound like a great way to start your 2019 does it?
That’s why we want to show you, honestly and transparently, some of your cashflow finance options. Financial solutions that will open up growth, allowing your business to thrive.
If you require an immediate lump sum of money, to fund a takeover, a buyout, machinery repairs or new equipment, then a bank loan could be the best option for you. It’s a lump sum, pre-arranged for a term and rate you can afford. However, a loan is a debt, and assets could be seized if you cannot afford to repay the loan. You must also ensure that the loan is for the correct amount - not too much and not enough.
Top tip – don’t think your only option is your high street bank. There are many independent brokers who specialise in arranging loans, many of which can be set up with no arrangement fees, short and long term options, even payment holidays. By using an independent broker, your finance is arranged far quicker than if you were to arrange directly – with monies in your bank within days.
Also known as invoice finance, this alternative finance solution currently helps over 40,000 businesses in the UK. It isn’t lending, it’s advancing funds on the money that you are owed from issued invoices. It’s just like getting paid the same day that you end the invoice. It’s simple to manage - you issue your invoice, you send a copy to your provider and you are advanced up to 90% within 24 hours, with the balance paid once your invoice is settled by your customer.
The constant and seamless advancing of cash ensures that you have a fluid and constant cashflow resource, plus the facility is quick to arrange and grows automatically with your sales growth.
Top tip – if you don’t want your customers to know you have a factoring facility, then you can choose confidential invoice discounting. It’s a confidential facility so no one knows about it other than you and your provider.
Whist an overdraft shouldn’t be considered for long term usage, it can be a flexible means to additional funds. It can be useful if you experience a hit and miss culture of overheads out and payments in, allowing you to manage unexpected, ad hoc costs or bills. It is however a debt; it’s therefore not advisable to look at it as an option for permanent lending; otherwise you won’t ever find yourself out of an overdraft.
The advantages to a bank loan is that the funds are almost instant - assuming you have a prearranged overdraft in place. On the flipside, overdraft charges can be costly.
Top tip - check with your bank whether your overdraft is secured or unsecured. You may need to consider a more expensive unsecured overdraft if your assets are used as collateral and yet they are what makes your business i.e. machinery, technology or vehicles for example.
Honest and Impartial Advice
Like any business sector, not all invoice factoring companies are the same. It’s our ‘Calverton Culture’ to offer you the very best, most honest and impartial advice for your needs. Even if that means using a finance package we don’t offer. It’s not about us, it’s all about you.
If invoice factoring is the right solution for your business we’ll offer you a tailored and bespoke solution, delivered with unrivalled customer service, competitive charges and flexibility that grows with your business.
Call us on 01908 268888 for a friendly chat.