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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.

Does your Company need Corporation Tax Funding?

Unlike other taxes where there can often be some leeway for late payments if a company gets into difficulty, when it comes to corporation tax, once the deadline passes, those surcharges and penalties start accruing and can have a massive impact. This can put many companies under pressure in the run up to the tax payment deadline and force them into difficult decisions when it comes to business development and ongoing operational performance.

While there are many ways for companies to reduce their overall corporation tax bill, there’s always something to pay at the end of the day. Finding a solution that spreads the cost over the rest of year can help relieve unwanted financial pressure, release valuable capital for further investment, and give your business the breathing space it needs to get over potentially difficult periods.

At PFC we provide tailored tax funding for businesses that allows them to meet their corporation tax liabilities whilst spreading repayments more equitably over a period of months. This reduces the impact of a potentially large one off payment to the Treasury and can have numerous benefits including:

  • Makes sure businesses avoid being late with corporation tax payments because funds, for whatever reason, are not available or tied up at that particular time.
  • It releases valuable capital that can be used for developing new avenues and making sure existing business strategies remain on track.
  • It can relieve short term cash flow problems by essentially extending your tax payment deadline and making sure your business has more money in the pot.
  • PFC offers a flexible way to cope with any tax funding issues. Our tax funding facility allows for tailored loans between £1,000 and £2.5 million paid back over a period of 6 to 12 months.
  • The change to a fixed monthly cost for your corporation tax bill means that you can better budget over the year. You can choose to do it as a one off solution for current problems or incorporate into your ongoing business strategy.
  • Access to fast track decisions at PFC means you don’t have to wait long for a decision and solutions can be agreed in around 48 hours.

How PFC works

We are a brokerage group with a vast amount of experience in the field of private loans for companies, helping them manage areas such as tax funding, subscription payments and insurance premiums among our other funding provisions. We do this by having a close working relationship with our private financers, providing competitive funding for businesses that need it.

Sourcing commercial funding that works for the business that is accessing it is a fine art and obtaining the right terms is something that takes a great deal of experience and industry know how. At PFC our focus is in finding the right solution that suits your business and not a one-size-fits-all proposition that fails to tick all your boxes. To find out more, contact our experienced and friendly 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.

When The Computer Says No…

Whilst we may officially be out of the recession and business is definitely on the up, many practice partners and SME owners are still finding it difficult to obtain the financing from time honoured, mainstream sources that they need for development or day to day business operations.

Let’s face it, banks are still reluctant to lend to small businesses – the level of lending fell last year by almost £400 million and though things have picked up in 2015 there are still plenty of businesses who cannot access extra funds when they most need it. According to recent feedback, access to credit continues to be one of the major hurdles that small businesses face, on a par with the rising costs of utility bills and problems associated with getting payment from clients.

In short, there are plenty of instances when companies need a loan and the banking computer just says no.

So what does a small business or private practices do when it needs to grow or access finance and can’t get the bank to agree a loan? The good news is that there are alternative solutions available and many SMEs are starting to explore these avenues, building long term relationships with private financing companies that are more than simple monetary arrangements.

PFC works in a totally different way to your local bank. It’s not just about filling in a form and meeting set criteria that are largely skewed against lending in the first place. We are here to build a long term business relationship and not just tick off boxes for a loan formula in the vain hope that you might be eligible.

Our aim is to find the loan package that suits your business and give you access to fast, reliable finance that helps you to stay competitive. We do this by having on board more than 30 funders who are willing to lend to a variety of SMEs, from new start enterprises, to long-established companies.

Whether investing in new equipment, or simply a desire to introduce capital into the business for intangible purposes, our standard working capital lines of credit are ideal for general business investment needs.

Our combined 30 years’ experience is honed across multiple industry sectors, encompassing nearly every type of UK SME business.

With dedicated account handlers who get to know what your business really needs and fast response times, the PFC team has over 30 years experience of providing finance that simply helps businesses like yours grow. It’s not about targets and algorithms, it’s about building relationships that matter which is why we are able to provide the right access to finance for over 90% of our clients.

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