Business Mortgages and Business Finance
Anyone running a small business will know how hard it is to secure finance, mainly because the banks are not candid about their lending policies. Business as usual they cry. Not so. Valuable time can be lost looking for help on the High Street and an untimely delay could have disastrous consequences.
What then is the alternative? A Business Finance Broker could be the solution, as he/she will be ‘plugged in’ to the entire lending market. Business Finance Brokers are not be tied to any institution and are able to provided unbiased information and assistance.
If a business is in a challenging situation and finding it hard to raise funds they will need to identify whether the main issue is the serviceability of proposed borrowing or the value of the security offered. If the ability to repay is hard to prove, but adequate security is offered, the solution may be a bridging loan, sometimes called a high speed bridging loan – as a valuation and legal due diligence are the only processes and these can be progressed simultaneously and quickly. This means that the borrower quickly receives much needed funds and has a window of time to address the ongoing issues affecting his business. The broker can in the meantime look for a more conventional facility, such as a business mortgage. If there is no suitable security they could also turn to other types of business finance such as receivables finance. This can take the form of factoring or confidential invoice discounting. This is effectively an instant advance against monies owed to the business.
Another imaginative way to raise cash is something called ‘Payroll funding’. The lender meets the payroll of a company for two months. On month three and thereafter, the lender meets the payroll again and the company reimburses the lender for month one and so on. Another example is advances against card terminal receipts. An advance is made against projected receipts and repaid by a deduction from those payments as they are received.
Another source of funding is from private investors. People disillusioned with the returns from banks are investing directly by lending to businesses disenfranchised by the banks. This is especially prolific in the property development sector.
So next time a bank manager says his computer cannot help, be aware that it possible that a business finance broker may have an alternative solution. Call us if you want to find out more on 01425 600129 (Local call rate)