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The Shot In The Arm That Your Business Needs?

Piggy bank with cash flow injection

Like me you are probably an avid viewer of updates to the progress of the Covid-19 vaccine roll out, monitoring when our most vulnerable will start to be broadly protected by the vaccination shield as well as for clues to the timing of any semblance of a return to normal life.

Unfortunately, while enormous strides are being taken in the UK, we are several months from when we may operate our lives and our businesses as we have previously, and so we have to plan for how we guide both through the pandemic and out on the other side.

Cash flow or working capital, however you want to term it, is what allows your business to operate, trade and essentially exist. That sounds like an over simplistic statement, but the reason why businesses use cash flow forecasts is to stay one step ahead in ensuring the flow of cash in their activities.

Cash flow provides for a wide range of purposes such as wages, fixed overhead costs, paying suppliers and increasing or diversifying your activities as business conditions dictate – or opportunities present themselves. When cash flow dries up, your trading activities can cease up, and this can prove terminal.

Even if your company has not been directly impacted by Covid-19 and suffered lower sales or productivity, or even a forced closure, it is highly likely that through your supply chain, staffing or customers and clients you will have felt the effects in your cash flow; the wheels of virtually all businesses have hit bumps in the road.

Cash flow or working capital, however you want to term it, is what allows your business to operate, trade and essentially exist.

Invoice Finance may not be the most suitable product for every part of the economic cycle – but think of it another way in the current Covid-19 pandemic: what other financial facility will pay you for most of the work that you have completed just a few days after you have completed it, when your customers won’t be settling anything with you for another 60+ days?

We see this as the clearest demonstration of the ends justifying the cost of the means – many businesses won’t be able to manage without these facilities in the coming economic climate – and we consider Invoice Finance will likely be one of the best cash flow conservation tools available to companies.

  • It’s flexible and can adapt to most sectors and business models; it fits with business conditions and turnover, unlike the rigid structure of a business loan.
  • Your company will need continued support to ensure that waiting for invoices to be settled doesn’t limit your activities – or your ambition.

Invoice Finance lenders are currently offering many incentives for SMEs to try a facility and are convinced you will quickly recognise the benefits and adapt to it longer term. These incentives can include:

  • No facility set-up fees
  • Discounted interest rate on the facility for an introductory period
  • An initial contract free period, often 6 months

If your company has an Invoice Finance facility in place you might be wondering how we could help you; whether or not you are directly Covid affected there may be cost and additional benefits available to you right now with another provider.

If your business has been affected by Coronavirus, then until the end of March you have a unique opportunity to access an Invoice Finance facility under the Government backed CBILS scheme – where some accredited lenders on our panel can offer some great benefits for your company, over and above everything that you will gain from your improved access to cash flow:

We strongly believe that for Covid affected, eligible companies, the extended application time represents a unique opportunity to access funding that there is no guarantee will be replaced later in 2021. 

If and when underwriting returns to a world of no Government guarantees, and companies are evaluated on 100% of the risk of the borrowing, unfortunately there could be a period of adjustment for both businesses and lenders.

CBILS Invoice Finance – Differing scheme features from our lender panel:

  • Invoice Finance with no set up costs, no service fee and no interest charges for 12 months (100% cost free for 12 months) – and no ongoing contractual ties beyond that period
  • Term loan alongside an Invoice Finance facility – loan for up to 40% of the facility level for up to 5 years, CBILS Business Loan benefits apply
  • ‘Top Up Funding’ – commonly up to 30% extra added to the pre-payment limit of the Invoice Finance facility – up to a maximum of 100% of invoice amounts submitted – no interest charged on the ‘Top Up’ portion for 12 months

CBILS Eligibility check: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

All of these CBILS facilities are open to eligible Covid affected businesses that already have an IF facility with another provider.

Please Ask Yourself This Question:

As you approach and plan for the next 12 months, is it likely that you will ALWAYS have the cash flow necessary to meet wage bills, pay suppliers, or grow your activities, without the certainty of knowing that when you issue an invoice you will get funded almost immediately?

In these difficult times, it could pay to add certainty wherever you are able to. Why not know for sure when your invoices will be funded?

Why not talk to me today about what options are open to you – it’s never too soon to get ahead of the game and think about how to keep the cash flowing in your business.

Mark.

Please call 07726 195 106, or e-mail mark@essexcommercialfinance.co.uk

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Essex Commercial Finance Limited  is a company registered in England and Wales with Company number 12610135
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