Keep your friends close; keep your broker closer
While conditions in the traditional lending markets worsen, now is an opportune time for businesses to seek out alternative funding solutions...
With the International Monetary Fund (IMF) predicting that the UK will see its economy shrink by 2.8% in 2009, and official Government figures showing that we are now in recession, owners and managers are doing all they can to manage their businesses through these difficult and unpredictable times.
This challenge is made no easier by the reluctance of traditional lenders to provide much-needed cash injections that can make the all important difference to a business flourishing or failing.
Yet, while conditions in the traditional lending markets worsen, now is an opportune time for those prepared to seek out alternative funding solutions. Current economic conditions mean that alternative solutions, such as invoice finance, have taken on a renewed significance for small businesses looking to unlock cash and represent a lifeline for many who are finding traditional sources drying up.
Invoice finance is a flexible and innovative form of funding which allows businesses to raise funding based on the value of its outstanding sales invoices, releasing capital back into the business. An invoice financier will typically release up to 85% of the value of sales invoices as they are raised and collect outstanding invoice payments from client’s customers. The remaining 15%, less a small service fee will be paid to the business once payment has been received. The invoice financier will also prepare and send out statements, telephone customers, and maintain professional and detailed accounts of all transactions.
While there are many providers offering alternative finance packages, it is well worth shopping around by speaking to an independent broker, such as Cashflow UK, who will advise on securing the best facility to match particular financial circumstances. During such uncertain economic times, it’s also advisable to check that any potential finance facility includes bad debt protection, which offers cover should a major customer become insolvent or cannot settle outstanding payments owed.
Cashflow UK engage with the whole invoice finance market and thus the myriad of financial solutions available. The key being to remain impartial and to ensure the marrying up of the financial needs of its clients with the most suitable funder/solution is correct, leading to long and prosperous relationships for all.
The message to the business community, especially in this time of economic upheaval, is a simple one: keep a close eye on the market and befriend a specialist broker - these small steps could well be the key to unlocking a successful future.
Kevin Weaver
Director, Cashflow UK
If you would like to find out how Cashflow UK can help your business call
0800 132 156.
