So many of us spend time lying awake at night thinking about our business cashflow.
The question is why?
Let us help by guiding you through the many fast and flexible solutions available for this basic business need.
The market is bursting with a broad range of financial products to smooth over all kinds of cashflow lumps and bumps. Businesses can hit cashflow problems due a number of reasons:
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- Maybe you run a seasonal business which has highs and lows through the year
- Maybe you have a Business 2 Business arrangement and your clients pay on terms such as 60 or 90 days
- Maybe your stock purchase of raw materials has to be made way in advance
Solutions can be short-term or longer-term and the flexibility is almost endless and the cost less than you think.
Over recent years the competition in the cashflow finance market has driven this increase in options, flexibility and service; making solutions faster and even easier to use.
The three main types of cashflow solutions are:
- Revolving Cashflow facility:
- Behaves similarly to a bank overdraft, typically ranging between £1,000 – £200,000. Like a bank overdraft, you pay interest only when funds are withdrawn and can repay at anytime. We have lenders who will put the facility in place for free, and you only pay when you draw down, interest rates can be 2% pcm.
- Tax or VAT bill facility:
- There are an assortment of options designed specifically to borrow the value of your VAT bill on a short term basis. Delaying a tax bill payment can escalate quickly, sometimes spiralling into credit issues and in the worst cases a winding-up order from HMRC.
- Invoice Finance facility:
- This allows you to borrow against the value of your invoices. Draw down up to 90% of the value of an invoice immediately. When the client pays, receive the remaining balance less any interest or facility costs. Most commonly used by rapidly growing companies, start-ups and established businesses where clients have long payment terms. Invoice finance is fast and flexible and with many available features, including:
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- Subscription or Pay as you go – How many invoices do you want to fund against and how regularly will you use your facility.
- Fully-managed debtor collection – This is an optional service where you can choose to transfer the responsibility for debt collection to your lender. This is called invoice factoring. Some lenders will also offer protection against bad debtors as part of the service.
- Multi-currency – international firms can use invoice finance in multiple currencies as well as access 100% export costs.
- Accountancy software integration – If you are using Xero, Sage50 or Quickbooks etc some providers will integrate the facility directly into your software package, making it simple to manage. Alternatively most providers will offer an online portal.
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- This allows you to borrow against the value of your invoices. Draw down up to 90% of the value of an invoice immediately. When the client pays, receive the remaining balance less any interest or facility costs. Most commonly used by rapidly growing companies, start-ups and established businesses where clients have long payment terms. Invoice finance is fast and flexible and with many available features, including:
With so much flexibility and options, working with a broker will make navigating the market easy and achieve the best solution for your business, saving you time and money.
Zume Finance is an independent and whole-of-market broker. As we are not tied to any lender, we work to get the best solution for you with the lender that is right for your circumstances. Get in touch for free no-obligation advice.
Fill-in the form below to arrange a call back from one of our team who will talk through your available options and arrange for a free consultation.
