Research reveals that in 2016, more than 275,000 companies in the UK were showing signs of significant financial distress. How can a struggling business obtain vital finance?
Plan
Small businesses routinely experience issues with cashflow, with fixed and variable monthly outgoings sometimes exceeding incoming cash. Many smaller firms will operate at a loss during start-up phases and in marginal trading periods. As such, they are unable to muster cash for investments which are essential to growth. It’s every small business owner’s nightmare.
If your credit rating is acceptable, you may be eligible to apply for a business loan. Alternatively, if your credit score is poor, there is the option of asset financing, in which you use your business assets (for example, plant, machinery or property) as collateral against a secured loan. Whilst there is some risk in doing this, it provides essential cash in order to fuel growth and longer-term stability.
Loans
In order to be in a good position to obtain any business loan,, you will need to demonstrate an achievable plan. The lender will need to know how the money is to be spent, how the business is going to grow as a result of this cash injection, and how you are going to finance repayment of the loan.
Cash
Always be realistic with your budget and the sums required and ensure that you have the necessary financial projections to support your figures. This will show the lender that you have done your homework. What do you need the money for? New machinery, software development, extra working space or perhaps research and development?
Lender
Research lenders who are likely to say yes to your type of business. Whether you go to a specialist lender or a broker, have all your answers to hand. You should be able to find a business finance broker in Gloucestershire, such as http://www.choicecommercialfinance.co.uk/, and indeed elsewhere in the country with relative ease.
Apply
Prepare your application paperwork, including your business plan, financial projections and up to date accounts. Application times vary from lender to lender. In some cases, the finance provider will research your company on social media sites to get an understanding as to what your business is about and its reputation.
It may take planning and persistence, but a positive result can secure a long future for your business.