The days of simply speaking to your bank to arrange finance have gone, along with the traditional bank manager to business relationship.
Businesses depend on finance and whilst there are plenty of providers, navigating through the maze of facilities can be time consuming and not always rewarding. This is where third party advice can be enormously valuable.
One basic principle to always bear in mind is that the length of time over which you are looking to borrow should broadly equate to the expected life of the asset (of whatever description) you are looking to fund.
Business history is littered with failures brought about by borrowing inappropriately. Hence the importance attached to getting it right.
Below is a list of the most popular types of finance available to businesses; it’s not an exhaustive list but does cover the most used facilities. Funders are for ever fine tuning their offerings, which tend to be variations on a theme as opposed to brand new.
- Asset Finance (including Hire Purchase, Lease Purchase, Leasing)
- Invoice Finance, (including Factoring, Invoice Discounting & any facility, however described, where a businesses debtor asset is the cornerstone of a funders security)
- Bank Loan
- Bank OverDraft
- Business Peer to Peer (P2P) Loans
- Trade Finance
- Equity/Venture Capital
- Working Capital Loans – Non-Bank
- Commercial Property Loans (to include development finance)
The major High St Banks offer every type of finance listed above, (with the exception of P2P) via an assortment of operating subsidiaries. To many businesses, having all their needs catered for within one brand is seen as a positive, to others, the exact opposite.
There is then an ever increasing number of funders offering facilities, calling themselves Challenger Banks, FinTech, Alternative, CashFlow specialists etc etc.
Faced with an elaborate menu of funding types and funders, finding the right facility can be time consuming and not always rewarding. Rates can vary massively as can security requirements, particularly when it comes to Personal Guarantees.
This is why a good, independent, third party can add real value. If you have any queries about the right sort of finance for your business please call/text me on 07966 492154 or email enquiries@factoringpartners.co.uk