There are many different financing options available to businesses and entrepreneurs:
Asset finance is a form of funding that uses the asset as securityand helps business release working capital. It is a flexible means of fundingbusiness investment without taking money out of reserves. Asset finance has thepower and flexibility to release the locked-in value that your business needsto keep moving.
Bridging Finance (Cash Advance / Short-term finance)
Bridging Finance is any short term financing to provide interimfunds between funding cycles or until the next imminent event.
Fast Business Cash
Fast Business Cash options can inject cash at times when you most need it. Typically 3-10 month term loans where cash can be in your account within days (or sooner). This type of funding is beneficial for seasonal businesses, to take advantage of short-term growth opportunities or to cover unforeseen bills. Lenders will assess your ability to repay the loan -not lend against a specific asset. Also suitable if credit record is not spotless. There are a wide range of short-term loans available, often with monthly repayment schedule. Typical annualised cost of loan is 20-60% depending on your credit rating.
Flexible Credit Line
Flexible line of credit to draw down as you need access to cash. Funding can be flexibly repaid and re-drawn. Businesses and Directors have to demonstrate a good credit history. Lenders may require business plans, financial forecasts, as well as personal guarantees. Costs vary significantly based on your credit rating, volume of lending, and other factors. As a guide expect annualised costs to be 10-25%.
Secured Business Loan
A secured loan is arranged for a fixed period, typically over the expected life-span of the asset used to secure the loan. The loan can also cover a shorter period (e.g. less than 2 years). Lenders will want to know details about the asset you own/want to purchase as well as how the funding will benefit your business. They may require an appraisal/valuation of the asset. Lenders are typically willing to lend up to 80% of the value of the asset. Costs vary significantly based on your credit rating, the quality of the asset, volume of lending and other factors. As a guide expect annualised costs to be around 7-15%.
Unsecured Term Loan
An unsecured term loan is arranged for a fixed period, typically greater than 12 months.Unsecured term loans are provided by a wide range of traditional and alternative lenders, including peer-to-peer or crowdfunding platforms. Lenders will want to know what you are using the money for (e.g., hiring new employee or entering a new market) and how this will benefit your business. They may require business plans, financial forecasts, as well as personal guarantees. Costs vary significantly based on your credit rating, volume of lending and other factors. As a guide expect annualised costs to be around 7-20%.
Invoice Finance (Factoring, Discounting / Cashflow Finance)
With this type of finance a business can collect between 85-98% of the value of its outstanding sales invoices upfront. The provider of the funds may either take over the collecting of money owed by your customers or you may agree that revenue management is done by your company. Lenders usually take over commercial invoices (invoices you have issued to other businesses) making invoice finance most suitable for companies that mainly sell to other businesses. Particularly suited for businesses that are fast growing as your access to financing grows with your sales ledger. Invoice financing companies will contact customers to verify outstanding invoices; some providers may require that they take over your revenue management. Annualised costs of invoice financing vary significantly and can be 2-25% of financing volume.
Gives you an advance on predicted sales/ predicted credit card sales to provide a flexible way of raising finance. Allows you to match repayments to your cashflow. For outlets, retailers, restaurants, online merchants, or businesses with card terminals / visibility on future payment streams. Can be used to top up funding from invoice finance. Also suitable if credit record is not spotless. The advance is either as an agreed fee or as a percentage of sales; repayments are often made daily as a share of your sales.
Revenue Advance (Merchant cash advance)
No fixed interest or capital repayments every month, rather you paya percentage of your revenue until an agreed amount is repaid.
Supplier Finance Programmes
Supply chain finance creates a supply chain proposition that enablesboth parties to manage their liquidity and maintain margins.
Working Capital Maximisation Programmes
Working Capital products can improve cashflow and fund business growth ambitions.
Solent Growth Hub in conjunction with Hampshire Chamber of Commerce can help you find, compare and apply for all types of business finance, from Asset Finance and Bridging Finance through to Invoice Finance and Unsecured Loans.
In collaboration with the Rangewell platform, we have access to thousands of loan products from over 260 lenders.