Businesses need finance to not only purchase asset but to fund operations, insurance premiums and other expenses. There are a range of business finance solutions available to ease the burden and your bank is not the only source.
If you need funding for general operations on a short, medium or long term basis, most businesses opt for an overdraft. This may also be referred to as a line of credit.
You may need to cover the lag between purchasing supplies required for production and when you will receive payment from your customers. You may have seasonal or cyclical fluctuations in your business or have to deal with unexpected events.
Most businesses will naturally approach their bank for an overdraft to cover general costs and expenses. But some banks have strict guidelines are will not always extend an overdraft to business.
An alternative is a non-bank overdraft. This provides you with a line of credit from a finance institution which is not a bank. It may be established at a fixed or variable interest rate for a set or flexible time period for a set maximum amount. You only pay interest on the amount of the overdraft that you use.
This type of financing can be arranged for you by a professional finance broker.
If your customers don’t pay their invoices to you in the most appropriate timing to suit your business, you can consider Debtor Invoicing Funding to take the pressure off your own cash flow. A finance broker is usually best-placed to arrange this for you.
A lender will take on your debtor invoices, pay you immediately for a large percentage of the invoices and pay you the balance when they receive payment from your customer. Interest is charged usually at a fixed rate.
This can be very useful to provide certainty of revenue for many businesses.
If you have large insurance premiums which are due in full annually, it may place undue pressure on your business. If that is the case, organising Insurance Premium Funding could be the solution.
A lender effectively pays the premium to the insurer in full on the due date and you repay the lender in fixed equal instalments plus interest. This allows you to spread your large premium payments to be paid monthly, quarterly or half-early.
We know finance brokers that work with many businesses in arranging business finance to ease the cash flow and provide certainty and enable growth. If you would like their contact details, please get in touch with us.