Need finance quickly to take advantage of an opportunity? Is your cash flow (or lack of) slowing your business? Just starting out and need funding advice? When there are so many options available for business finance, the question becomes: what’s the right one for me and my business? That’s what the EST Commercial Finance is here for.
We’ll break down the barriers to help you understand the options available to you and use our expertise and outstanding lender-relationships to get you the best deal possible. To help with this, we work closely with our accounting team to ensure considerations are made from all angles.
Trade finance addresses some of the working capital pressures by financing stock while it’s being produced and transported. Instead of waiting several weeks/months for your product to be manufactured and transported to the UK and having working capital tied up for that time, you can bridge the gap with trade finance. It can also come in useful if you have less favourable new supplier credit terms which requires committing to a larger deposit, which may then affect the amount of product you can purchase.
If you operate business to business transactions and offer credit terms to your clients, cashflow finance (or invoice finance, as it’s sometimes known) could dramatically shorten the time it takes to get paid, allowing you to put that money into your businesses sooner. There are three main types of invoice finance:
Factoring (a.k.a. a disclosed facility) – this allows you to draw against an invoice and the invoice finance provider will be responsible for collecting the balance from the client. Factoring includes bad debt protection.
Invoice Discounting (a.k.a. a non-disclosed facility) – this also allows you to draw against the invoice, but you will be responsible for collecting the balance from the client. The need for bad debt protection is removed, unless stipulated by the lender at the time of application.
Spot Factoring – particularly useful if you have one larger client and need the funds quickly and the rest of your clients are smaller, or if you need funds from one item of work to continue providing a service to the client.
Asset finance allows you to make larger capital investments and spread the cost to fit in with your cashflow. It’s one of the most commonly used financial tools for a company to get equipment needed for their business. Almost anything can be funded using asset finance, including vehicles, computer equipment, office furniture, shelving, racking, large plant and machinery, software, boats, and aeroplanes. There are a few different options when using asset finance:
Finance Lease – the lending company (lessor) purchases the asset and rents it to you (lessee) for an agreed interest rate and term. Finance leases can have balloon payments at the end of the term, and the asset is sold to a third party to settle the outstanding balance.
Hire Purchase – this is similar to the finance lease but the options at the end differ. At the end of the term, you can take full ownership of the asset for a nominal fee so long as any outstanding finance is cleared.
Operating Lease – this is used where the lease term is short compared to the useful life of the asset or equipment.
An unsecured business loan means there is no tangible security being offered to the lender (like property or other asset). Instead, the lender takes repayment commitment in the form of personal guarantees, though the entry level is pretty low – around £5,000 and up.
Many firms will consider this type of lending, but the most common in the marketplace is crowdfunding. Crowdfunding can go as high as £350,000 before the lender needs tangible security, depending on the strength of the business or proposal, which we can help you put together.