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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.

WHAT’S THE SCORE WITH CREDIT RATINGS?

Business owners who believe they have a ‘bad’ or ‘low’ credit rating can be understandably reticent in applying for essential funding. Perhaps they base this on the knowledge their personal credit report is weak, or they suspect their trading performance isn’t perfect.

 

However, although it is fair to say that UK businesses and consumers have experienced a tightening in lending from the high street banks, here at PFC we take a slightly different approach and principally look at the fundamental parts of the finance proposal: purpose, amount, length of time trading, number of owners and the term required.

 

It’s the combination of these factors that create a proposal and when they make ‘sense’ (the purpose is valid and will aid the business, the amount requested is reasonable considering the monthly revenue income for the company, historic trading patterns, number of equity owners to reduce the lend/risk ratio, and finally a repayment term that is sensible and matches the purpose) they can outweigh the credit scoring condition.

 

Unlike many lenders who use faceless algorithms to make lending decisions, at PFC we work with a panel of more than 30 lenders and examine what are a company’s or individual’s needs and what information do we need to help us make an informed decision.

 

We also speak directly with our clients to get an understanding of their personal situation and explore many different routes to finance that will match their needs and circumstances.  For example, a client may come in asking for a loan as they are needing money to expand their business or to help with cash flow at certain times of the financial year.

 

By having an understanding of a client’s business or their circumstances helps us find alternative routes to finance for them. As such, we may be able to secure finance against an unpaid purchase order or even existing assets within a business that could help release capital for growth rather than just take a traditional ‘business loan’ route.

 

Working with the information we have from the business or individual we are then able to approach our panel of lenders and find the right package for them, pulling in specialist finance houses when required.

 

So, if you are looking to access finance but are worried your credit score isn’t good enough, why not try PFC and see what we can do for you?

BREXIT – IT’S BUSINESS AS USUAL

It’s now a couple of months since Britain took the brave step to exit the EU.  Since that time we’ve seen a new Prime Minister and Cabinet appointed, a volatile stock market and turbulent exchange rates as well as interest rates reach record lows.

Although only few may have predicted this situation at the start of the year, the reality is that the world continues to turn and that this economic environment is the new ‘norm’.  The good news however is that British businesses have been fast to react and return to business as usual.

According to the first estimate of the Office for National Statistics, GDP growth strengthened to 0.6 per cent in the second quarter of 2016, although much of that increase in activity was concentrated in the earlier part of the quarter, with a falling away seen in May and June as uncertainty crept in.

Although figures released this month show that the UK economy contracted by 0.2 per cent in the month following Brexit, the latest forecast from the National Institute of Economic and Social Research (NIESR) is that it’s increasingly unlikely that Britain will tip into recession.

Last week the Bank of England also forecast that the economy would narrowly avoid a recession, largely because of its decision to cut interest rates to a new historic low of 0.25 per cent and restart its Quantitative Easing monetary stimulus programme.

With the various initiatives in place to stabilise the economy and confirmation from Teresa May that Britain will leave the EU, we are however seeing more certainty and with it confidence return to the marketplace.

As a company that’s built a reputation for lending to a range of businesses from private practices to larger corporates, SMEs and individuals, we believe we are a good barometer of what’s happening in the UK.

Since Brexit we have seen the volume of requests for finance and actual lending increase by more than 20%, when compared to this time last year.  This is clearly a sign of confidence in the marketplace.

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

Having a wide range of funders willing to lend means that we are able to offer the most appropriate access to finance for the company’s requirements.  In the last few weeks we have provided an eclectic range of funding from six figure personal loans to invoice finance, VAT and tax funding to asset finance.

These are new and exciting times for the UK’s economy, with an unprecedented opportunity to take advantage of the low interest rates and more financial institutions with an appetite to lend, the outlook for SMEs that provide the backbone of British economy is extremely positive.

How Invoice Financing Can Improve Cash Flow

It’s one of the main issues that B2B suppliers face, particularly SMEs and sole traders. When a product or service is supplied to another business and an invoice raised, there is generally a delay before payment is made. It can take on average 30 days before funds return to your business and can be reinvested, used to cover running costs or get more product out into the marketplace. In many instances, especially when in partnership with large corporations such as supermarkets, this invoice payment delay can be anything up to two to three months.

That’s a long period when valuable cash flow is stalled.

Obviously, this situation causes problems for small and medium sized businesses working on tight or limited budgets. Invoice financing is designed to help companies get over this problem. When an invoice is raised, financing can be taken out to provide immediate payment, rather than having to wait until the invoiced company pays up. Once that invoice is fully recovered, the loan is simply paid back.

Cash flow is important to all businesses but more so to SMEs and sole traders who generally have to compete within tight margins. Getting the right invoice financing in place to ensure that money is available when a business most needs it is part of accepted operating strategies nowadays. That means a business isn’t left on hold while they are waiting for payment to be received. They can implement growth strategies and deliver more products and continue to thrive rather than treading water and twiddling their fingers while the client account department hangs onto that invoice.

For business to business companies that rely on a flexible cash flow to compete in their markets, invoice financing is the perfect solution for the immediate release of finances. It allows them to introduce working capital, pay wages and focus more on the future.

At PFC, we have access to a range of funders and can provide invoice financing to businesses across a wide spectrum, from those that have been operating for a while to start ups that have less of a credit history. It’s not just about providing loans to cover these payments, allowing companies to continue to operating effectively. It’s also about building strong relationships that are designed to deliver the financing options many SMEs and owner managed sole traders are looking for to make their businesses more competitive.

Spread the Impact of your Partnership Tax Bill with Tailored Tax Funding

Partnership tax generally costs more as a whole than corporation tax and working out each member’s liability can be difficult at the best of times. This can affect businesses such as architects, lawyers and accountants who share a common cause but often operate as self-employed entities within the partnership.

Making sure everyone in the partnership is well equipped for dealing with the tax payments due in January can ensure your business runs more smoothly and everyone stays on track and can meet their commitments. Swapping a one of payment to the HMRC for tax funding, where you basically get a loan for the amount you are liable for and pay it over monthly instalments can relieve a huge amount of pressure on practices.

At PFC we offer tailored, private tax funding that helps businesses working through partnerships to spread their liability over a short term period of 6 to 12 months. Most businesses falter when faced with unexpected financial settlements such as tax bills and having a way to ameliorate that impact can make a huge difference to the day to day operation of all partners.

The Benefits of Tax Funding for Partnerships

  • It spreads the cost of tax payments across a longer period, making sure that partners don’t have to find valuable funds as the deadline for HMRC returns approaches.
  • It allows partners to know where their tax liability lies and how much they need to pay each month rather than trying to get the payment together at the last minute.
  • Some partners are better at dealing with cash flows and tax liabilities than others and introducing tax funding can make sure additional pressure isn’t put on their capabilities because of the failures of another member of the team.
  • It gives breathing space for the partnership that allows it to grow and develop especially at a time of year when business is naturally slower.
  • The loan can be made by an individual who is self-assessing, to make sure liabilities are covered, or by the partnership as a whole to ameliorate any unforeseen charges.

How it Works for Partnerships

At PFC we’ve got a fair deal of experience in dealing with all aspects of tax funding for corporations, self-assessors and partnerships. With access to private funding that can be tailored to individual needs, we can work with you to find the right solution that suits your business. Payments can be made either directly to the HMRC or to the partner or partnership concerned and repayments can be spread over 6 to 12 months.

Tax funding is available for small and large partnerships whether the bill is just a few thousand pounds or much larger. If you want a solution that makes it easier to pay your all-important tax bill, then contact our highly skilled and professional team today.

Sweating your assets

Leveraging the potential of everyday business assets is just one way that cash strapped practices can generate the extra finances needed to grow or forge new paths within their industry. Find the right solution, and the right management company to handle it all for you, and a number of avenues can quickly open up that enable your business to function more flexibly.

Getting the Most out of Your Business Assets

According to the BBA, after a fairly stagnant period, it’s claimed that banks are beginning to loan more out to small and medium size businesses with over 30,000 loans agreed in the second quarter of 2015. For many businesses however, this may not be enough or there may be too many hurdles to overcome to access the finance. To such an extent, last year actual bank lending actually fell by some £400m.

As such, there are still many practices that go to their bank and get turned down for valuable financing, even when it is a relatively small amount. When that happens it can be difficult finding alternative sources of funding and a business can start to stagnate without the necessary cash flow. One avenue that’s proving increasingly popular is using your practice’s assets to secure a loan. You may be surprised how much you are actually worth.

Assets can come in all shapes and sizes, not just stock and infrastructure. For instance, your brand and logo is an asset and has a financial value as well as product and service developments and even written content. Your productivity and future potential is an asset too, though less tangible.

What your practice is worth today if it was sold is important. Whilst many very young practices may well have a negativity equity, others could have several thousands in previously unconsidered assets that can be packaged together and used to help get a loan.

How Asset Financing Can Benefit Your Business

Many practices require extra funding to meet short term and long term financial requirements, including partner buyouts and acquisitions as well as refurbishments and cash flow concerns. When the bank won’t agree to a loan it can get extremely difficult. The first thing practices need to do is identify the assets they have and then find how to leverage these.

At the Practice Finance Company our experienced advisors can help businesses find the right route to finance and secure a loan that not only matches and maximises your assets but also enables you to handle repayments. We’ve arranged over £3 million in funding for practices across the UK this year alone, helped by our access to private funding avenues. With the right financial team to support your business you can make your assets work harder and find you the right access to finance.

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