Navigating the Business Finance Maze

Richard Leeder recently helped a new client to navigate the Business Finance Maze after they ran out of essential capital at the worst possible moment.

A well-established contract building company who make money year in year out, but face all the usual pressures on cashflow, approached us when they needed funding quickly to satisfy a commercial mortgage lender.

Having gone over the original 12 month term of their agreed facility the funder had come to view the progress of the works. The original Victorian building had been gutted inside to make way for six 2 bedroom flats and four 1 bedroom flats; this seemed to worry the lender (they deemed the property to be in a worse state than 12 months ago, but our client argued it needed to be gutted to allow the rebuild!) and they only agreed to allow the extension of the credit facility if the builders could demonstrate that they had £220,000 available to complete the works.

The director of the company with the remit for raising finance was polite but reserved, happy to discuss the potential funding that we had available but seemingly a little disillusioned: ‘Of course this is all academic; in 14 years banking with our high street bank they have never extended us any credit. Last month we needed skips on site and were told we would have to pay up front, our credit status didn’t warrant terms.’

Challenge Accepted!

With three directors in the business we identified our first possible route to finance – to raise each of them a personal loan that could be introduced into the business, and repaid from the business bank account. Within 48 hours we had £110,000 approved and paid out. In some respects, this gave them an added benefit as they have each increased their ‘skin in the game’ with individual investments back into the company (fully unsecured) plus these personal loans will be converted into directors loans. Finally, we approached a Peer to Peer funder who arranged £50,000 working capital.

When added to their available capital, they now had the necessary £220,000 and were able to get an extension to the commercial secured finance and move on to completing the build.

Another working capital issue the business faced was a Corporation Tax bill of £30,000; imagine the directors’ surprise when informed that SMEs can now finance this short term cost with an unsecured business loan! This was placed with one of our top-tier panel lenders, with repayments agreed over 10 months.

That is £190,000 delivered in under a week for a business that failed to get funding from their bank for skips!

Fortunately, not all funders are looking for AAA and Tier 1. With more and more funders joining our panel and our experience in raising the capital required, at the best rates and quickly, it is very rare that we fail. The Bank may be unwilling to support you, but that doesn’t mean there isn’t funding available.

 

Why not get more Finance Insights direct from PFC Finance by clicking here.

Three reasons businesses need accessible cash

All businesses should have access to readily available cash. As the saying goes; “revenue is vanity, profit is sanity, but cash is king.” Whilst your business can be making profit, there will always be spikes in the year, from exceptional VAT bills to slow debtors. Shortages of capital can hinder your business decisions, which in turn could be detrimental to overall profit. However, don’t panic if this fund is yet to exist in your business, because that’s where we come in.

We know that readily available cash is not always possible for businesses and that it also doesn’t necessarily reflect the company’s financial stability. That’s why we’re always on hand to discuss your capital options.

In 2016, a British Business Bank survey was published showing that 60% of organisations had sought external funding between 2013 and 2016, with the majority of subsidies needed to help with working cash flow and to purchase fixed assets. But, if you’re still unsure as to why you may need a readily available cash fund, we thought we’d explain in more detail.

  • To help with cash flow

Working Capital loans are an ideal product to assist with companies looking to balance short term essential trading with the available balance of their business bank account. The working capital loan can be used to fund additional staff, trade through a slow-down in sales, pitch for new projects or provide a buffer before an expected large invoice is paid.

  • To purchase fixed assets

Purchasing fixed assets is having the cash available to purchase new items such as vehicles, technology or machinery (depending on the industry area). By being able to take advantage of such opportunities, the business can grow. Despite the initial costs, these purchases can be a long term investment, but of course, money is needed to make the purchase in the first place.

We offer both asset finance and refinancing options, which covers all types of equipment in many different sectors. With the option for seasonal repayments or deferred VAT, we have an asset loan to suit every business out there.

  • For emergencies

Life is full of ‘what if’s?’ and unfortunately at times, it may be that the business is negatively affected. With our contacts of over 50 lenders, access to finance is more available than ever, and as a result, emergencies become much less of a concern. We can provide finance agreements in less than 24 hours, meaning that any disasters that do arise can be dealt with quickly and efficiently.

Perhaps you’ve been hit with an exceptional VAT bill? We have multiple lenders on the panel who offer short term funding for SME VAT bills, many able to agree terms and release funds in one day.

Whether you want to grow your business but currently don’t have the funds, or if you need a short-term monetary resolution, don’t let a lack of accessible money stop you from moving forwards, because here at PFC, we have the access to Capital. So while cash may be considered king, external funding takes the throne. Take a look at our website to see the extent of the loans we offer or alternatively, drop one of our advisors a call on: 01829 738 799.

THE ROUTE TO FINANCE

For start-up businesses and SME’s, it can be tricky to convince lenders to grant you funding especially if your business hasn’t taken off the ground just yet or if you’re fairly new to the business and are already looking to expand. Often, if the principal bank does agree to finance the business, they will look to bolt-on far reaching security comprising debentures and will sometimes only agree to the finance if they can dilute their own funding with any of the available grants that exist for small to medium sized companies. This is very time consuming and laborious and certainly doesn’t help the client if they need fast access to decisions and finance.

We’re here to provide you with access to finance where others may say no. Together we can decipher what your best financing option would be, so that we can then put it forward to our panel of more than 45 lenders to find the best solution for the individual or business.

With our many available routes to finance you may never need to go to your bank again to ask for specific funding. PFC very rarely fails in successfully sourcing finance for our clients.

We listen to every business and we look at the size of your company, the owners and how much you have estimated that you want/need to borrow, so that we can work out ideal repayment terms and identify types of credit available.

In 2017 we have arranged an eclectic mix of funding already, for small sole traders up to multi-million turnover incorporated businesses.

Five and six figure VAT and tax loans (incredibly useful for ring-fencing essential cash within the business), single invoice finance (a few of our clients have provided current outstanding invoices which we have been able to get funding against to inject working capital into the company but without the need for entering into long term invoice financing), personal loans (many small business owners find this an ideal and competitively priced method of introducing capital into the business), asset finance (commercial vehicles, scaffolding and IT are some of the equipment we have arranged asset finance for so far this year), invoice finance and inventory funding (large major restructuring for a plant hire company, we were able to instruct a top-tier panel funder to roll out a new invoice finance package supported by a funding line for their stock) and many working capital loans.

In most instances, with a couple of items of supporting information (management accounts, last full filed accounts, and perhaps a few months business bank statements) we can propose to our chosen lender and obtain the approval within a few hours – this means from proposal to funds being paid out can be completed in as little 48 hours, and occasionally in the same day, depending on the type of finance applied for.

If this all sounds too daunting, don’t worry. You can always call us to walk you through the process and assist wherever possible along the way. If you’re thinking of borrowing to improve your business be it a small refit or a full-scale expansion, don’t hesitate to give us a call on 01829 738 799 or send us an email: enquiries@pfcfinance.co.uk.

Don’t pay the penalty, pay the bill

Are you likely to have to pay a penalty to HMRC because you can’t afford to pay your corporation tax bill on time? If so, you aren’t alone, according to Funding Option business owners were unable to pay their tax bill on time in the 2014/15 tax year and the HMRC took 1.8 billion in late payment fees.

The same company has also estimated that the amount owed in late payment fees is likely to increase again for the 2016/17 tax year too.

The possible rise in the already-steep figure could be down to the rocky economy around the time of Brexit. 2016 wasn’t the most financially secure year for a lot of businesses due to the economic uncertainty which in turn may have a knock-on effect with some struggling to pay their tax bill again this year.

The HMRC state that you must pay your corporation tax 9 months and 1 day after the end of your accounting period which is normally at the end of the financial year. Some companies may have two accounting periods within the same tax year as accounting periods depend on when your business was set up.

What’s more, the HMRC has been clamping down on late corporation tax payments with not only penalties but the seizure of assets as well. This is causing cash-flow problems for many SME’s who have been hit with a penalty. That’s not all, over the past five years’ banks have been cutting SME’s overdrafts too, causing further cash flow problems for small businesses wishing to access finance to pay their tax bill.

So, what other options are there for businesses? Luckily, PFC provide a range of alternative funding routes for businesses to choose from:

Refinance Assets – This is a form of lending that allows you to borrow against your tangible assets, from vehicles to equipment, even IT and office furniture can be refinanced to provide essential capital.

Invoice Finance – A method that helps to improve cash flow by allowing you to borrow money against any unpaid invoices you may have. We work with the UK’s leading Invoice Discount funders, with expertise in all sectors. We can also offer funding against single invoices if you don’t want to commit to full invoice finance.

Tax Funding – An option that’s available to every type of business, whether it be self-assessment, corporation tax or partnership. This funding option is available in fixed terms from 6 to 12 months.

Whatever your needs, PFC can arrange five, six and seven figure funding for VAT and tax bills for sole traders up to multi-director businesses. With access to a panel of more than 30 lenders, PFC can provide access to finance where banks may fail. For more information visit: http://pfcfinance.co.uk/sme-finance/ or Contact us directly on: 01829 738 799.

Simple steps on how to file a HMRC tax return

We are fast approaching the deadline for online tax returns (31st of January) and many of us are getting that tax return dread.  If this is your first year, you’ll need to make sure you’re registered and you may need to allow an additional 20 days.  The paper method allows more time with a deadline of October.

To ease the dread of the tax return deadline, we have broken the return process into simple steps;

  1. Get Prepared

Before you start your tax return make sure you have all of the necessary information to hand and allow yourself enough time.  You’ll need…

  • Details of your income – which might include finding your P60 (if you earned more than £8,500), your P11D (which outlines details of expenses and benefits), and payslips. You’ll need a P45 if you’ve changed jobs within the year.
  • You will also need interest statements from banks and building societies, and details of pension contributions made – plus information about any Gift Aid donations.
  1. Filling in the return

Always check your personal details first, this can prevent costly mistakes.  Fill in all sections that apply to your circumstance.  The system will react to the information you put into it and will prompt you as to where to find the information it is requesting.

Take your time.  The HMRC’s system will highlight when it thinks you’ve made an error.  You can always save and return to at a later date.

  1. Pressing Send

Always make sure you have read everything through and haven’t left any gaps within the form.  When you are sure you have fully completed the form, press send and wait for the confirmation message on your screen and make a note of your confirmation reference.

  1. Help!

If you need help with your return, visit  Gov.uk/self-assessment-tax-returns or call the helpline on (0300) 200 3310.

If you’re worried you can’t afford your tax bill you should always still file your return.  The fines for late payment are a lot lower than the fines for late filing.

 If you need help paying your tax bill, PFC may be able to help.  Contact us on: 01829 738 799.

Remember; there are plenty of people out there on hand to help with filing your tax return, just make sure you don’t leave it too late!

New Year, New Credit – Getting a fresh financial start

After months of gift-buying and festivities, the Christmas cheer is slowing down. Unfortunately, for most of us, that means putting down the mulled wine and returning to the 9 – 5 lifestyle.

As everyone knows, with New Year comes New Year resolutions. For some, it may be sticking to a strict, no junk food diet, or increasingly your weekly exercise regimes, but for the business owners amongst us, our resolutions may be more finance focused.

Whilst the economic burden of Christmas may be over, upcoming finances cannot be ignored. With the January HMRC online tax return deadline looming, as well as any outstanding company payments, it’s time to sit down and work out the maths.

Whether 2016 proved to be prosperous or unsuccessful will vary from business to business, but regardless, 2017 offers the opportunity for a fresh start. Through organising your finances prior to the New Year, every business will know where they stand in terms of profit and funding objectives. With this in mind, by this time next year, you can look back knowing that all your hard work has paid off.

At PFC, we understand that finance is not so clear cut and that organising your finances may be more stressful than creating a simple spreadsheet. However, we also understand the ways in which easy, flexible finance access can transform a business, which is why we’re here to help your enterprise start afresh. With a number of different financial schemes, we can ensure that 2017 will start as it means to go on.

From asset finance and commercial loans to invoice and inventory finance we provide a range of finance options to suit everyone, and with a team of dedicated lenders, we promise that each individual will receive a scheme tailored to their specific needs. Having worked with every sector, no financial problem is too overwhelming for us, and the success of our services has been evidenced time and time again.

If you need a fresh financial start, then get in touch today. We can provide fast, flexible and competitive rates from an unrivalled lending panel, comprising many of the top tier funders and niche specialised SME lenders, that all starts with a simple email. We’re here to help. Start 2017 with a new financial outlook, so that your business can grow to its full potential over the course of the next year.

Beat the January Tax Bill Blues

With the pressures of Christmas, it’s easy to forget about what might be due in January like filling out that all-important HMRC online tax return and paying any tax you owe for the year.

In the UK, 4.79 million people are registered as self-employed and are required to fill out a self-assessment tax form every year before the online deadline of 31st January. Many will have an idea as to what the figure will be, but a few may well realise the bill is unexpectedly higher than planned.

Either way, funding the January tax bill is proving to be an invaluable method of protecting cashflow for business owners.

PFC works with a panel of more than 30 lenders to offer customers fast and flexible access to finance. The team is able to assess an individual or businesses requirements and find a route to finance where other providers may fail. Some payments can even be processed in under 2 hours.

Customers can finance their tax bills over 6 or 12 months, providing essential budgetary advantages as they can spread the cost of paying the HMRC.

Get in contact if you would like to speak to one of our experienced consultants and understand how we can provide access to finance and help you beat the January blues.

PLANNING FOR THE UNEXPECTED

As we look back on 2016 it’s fair to say that it has been a year of plenty of unexpected outcomes.  Who would have thought this time last year that David Cameron would have resigned, Britain would be heading out of Europe and that Donald Trump will be the President of the United States in just a few weeks time?

The reality however is that throughout our lives we are often faced with the unexpected and it is those who are able to best adapt to the new situations that survive and even prosper.  This is also very much the case in business.

There are countless businesses out there that face change on a daily basis whether it’s due to external factors such as SMEs who face changes in government funding, through to businesses that lose an important customer in unforeseeable circumstances or even those affected by an unexpected 10% change in dollar exchange rates since June.

It’s at these moments that often cashflow or business plans take a hit.  Unfortunately, the days of a call to a friendly bank manager are over as the processes becomes more faceless and banks tighten their lending criteria.

The good news however is that access to finance is more available than ever through organisations such as PFC who can access finance for client businesses from a panel of more than 30 specialist business lenders.

Unlike banks, decisions can also be taken quickly offering clients agreement on finance typically in less than 24 hours and with cash deposited in the bank often within 48.  Being regulated by the FCA, we are able to work with a range of commercial organisations of all different sizes and business sectors to offer unparalleled access to finance whether unsecured business loans, asset based lending, invoice finance, bullet loans, commercial mortgages or personal loans.

Having a range of loans available and a team dedicated to finding the right access to finance to meet a client’s needs means that whatever the year ahead may have in store, there is quick, flexible and easy access to finance available.  As you relax this Christmas and look ahead to the New Year you can at least relax in the knowledge that whatever the future has planned for you, your finances can be taken care of.

 

How to Get Ahead With Your Debtors…

Every small business in the country will have experienced late payments at one time or another.  Fortunately, the issue is often short lived with customers paying up after a gentle prompt, however sometimes customers operate to different payment terms or may delay payment due to their own business issues which can have a negative impact on the cash-flow of the supplying business.

Any delays to payment can be hugely frustrating and have a negative impact on a business.  In the past, businesses may have approached their bank to extend their credit facilities or for a loan, however today more companies are turning to alterative lenders who are able to offer a broader range of funding options, with flexible and bespoke solutions to their individual needs exemplified by the Invoice Discount or Factoring facility.

Statistics from the Asset Based Finance Association suggest that alternative lenders are providing more funding to SMEs than ever before. In the first quarter of this year alone, SMEs raised £711m from the sector according to the ABFA, a 60% increase on the same period of 2015. The sector’s total lending to SMEs now stands at £19.3bn.

The increasing use of other types of business finance reflects a heightened awareness amongst SMEs that they do have funding options other than what’s available from the banks, with research suggesting that more than 75% of SME CEOs are now aware of options beyond traditional banking.

Industry data suggests that this is feeding through into take-up, for example, 12% of SMEs are already using invoice finance, while a further 46% say they would consider doing so if and when they need to raise finance.

The reasons that invoice financing are proving to be so popular is the speed in which they can achieve access to funds as well as the cheaper cost of funding and its simplicity. Additionally, the stress and time consuming nature of chasing payments from your debtors is taken over by the Invoice Finance provider, either on your behalf, or confidentially.

In fact, in most cases, PFC’s client that have taken up Invoice Finance facilities, often see a significant increase in turnover and profitability as they are given the chance to concentrate on growing the business and not chasing payments or dealing with extended payment days.

For these and other reasons, the Federation of Small Business and the British Chambers of Commerce have been keen to promote the option as one of the diverse range of financing options.

With uncertain times ahead and much change forecast for the economy, having access to alternative forms of finance can be the lifeline for many small businesses.  With access to finance and the rise of alternative finance options, let’s hope the frustrations of a small business owner are short-lived.

If you’re looking for access to finance, contact the team and let us discuss the options available to you.

FINDING FINANCE FOR THE INDIVIDUAL

Here at PFC Finance we pride ourselves on being able to offer access to finance like no other.  The team is made up of finance veterans who use their experience and inventiveness to find the right loan to suit the individual and the loan’s purposes.

Our approach to lending is also different.  Rather than approaching a bank or financial institution that only has one source of funds, we use a panel of more than thirty funders who specialise in lending for different objectives or people – meaning that we can find access to finance like no other organisation.   This is also the case whatever the applicant’s position whether on behalf of a large corporate, SME, private practice or individual.

There is also more good news as we are finding that since Brexit, the loan market is buoyant.  This market buoyancy is clearly illustrated by the volume of requests for finance and actual lending we have experienced which has increased by more than 20%, when compared to this time last year.

In addition to this, the number of companies willing to lend has also increased and we are pleased to announce that in turn our panel of lenders has increased by nearly 10% allowing us to open even greater access to finance than ever before.

A large part of this burgeoning sector is Personal lending.  PFC now has five sources of personal loan funding on their panel. Through these funders we can offer regulated and unregulated personal loans that can be used for private or business purposes.

With such an eclectic choice of funders, we can arrange unsecured personal loans from £1,000 up to £100,000. In rare cases, we can even source up to £200,000 of unsecured personal lending, although once you get to this rarefied figure, the lender will often look to take security as comfort.

Based on these criteria they can offer a borrower an affordable option to introduce capital into their business, or meet the costs of personal requirements, from legal bills to holidays, vehicles to house renovation.

Successful applicants are able to repay over terms as short as 3 months, or as long as 5 years, and with a panel of lenders to choose from, there is a range of finance available for borrowers with less-than-perfect credit.

Our client portfolio, from owner managed sole traders to multi-director companies, are increasingly using this credit type as a solution to their essential business finance demands.

Generally, the rates are lower than standard unsecured business loans. Additionally, no personal or director guarantees are required. There is also the capacity to introduce these personal draw-downs into the company balance sheet, with all of the benefits of a director’s loan (incorporated clients have this option).

Having a wide range of companies willing to lend means that we are able to offer the most appropriate access to finance for an individual’s requirements and a truly personal loan i.e. one that’s been tailored to you as an individual.

Case study

One such example of how PFC took a client’s need and built a tailored response to it is in the case of a family of four who were looking to raise the capital required to invest in a coffee shop franchise in the North East of England.

The four family members approached PFC to find the most competitive loan from its panel of lenders and decided to take out an unsecured personal loan for £25,000 each to raise the necessary £100k investment.  In doing so each family member was able to access an unsecured personal loan at an almost single digit rate, equally sharing the risk of the venture, and drawing down on finance cheaper than the general business loan market.

The four family members will be able to make the repayments over 60 months, providing manageable serviceability of the finance, and naturally low capital repayments while the business grows.