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Manage Finance

Financing Your Business When You Are Out of Options

One of the worst nightmares for a business owner is not being able to get the financing they need for their business. For many owners, the need for financing occurs when they have a cash flow emergency. Unfortunately, trying to get business financing during a cash flow emergency is very difficult.

Most cash flow emergencies happen due to the difference in timing between income and expenses. Often, expenses happen first. Income then follows. Due to this, companies need to have a cash reserve to handle expenses. However, business owners sometimes overextend themselves and get into trouble.

For example, most companies sell their products/services to other businesses on credit because large clients demand it. So companies give their client 30, 40 or 60 days to pay their invoices. However, the company itself must still meet its obligations while it waits to get paid. It has to pay suppliers. It has to pay rent. And most importantly, it must meet payroll. Sooner or later, the company may face an unexpected expense and run into trouble. It won’t be able to wait until an invoice gets paid. That is when the problems start.

Asking clients to pay sooner seldom works. Few, if any, will agree. Most clients pay their invoices in 30 to 60 days because that is how they keep their own cash flow healthy. An alternative is to look for business financing. Most business owners will focus on trying to get a business loan. The problem is that business loans are hard to get – especially if the business is in trouble. The lending institution will usually need to see audited financial statements, strong assets and excellent growth prospects. Few companies with cash flow problems meet this criteria.

A better alternative may be invoice financing. Invoice financing is specifically designed to strengthen cash flow by providing interim financing until invoices are paid. It provides the financing quickly, usually a few days after invoicing, enabling you to cover your operating expenses.

One important advantage of invoice financing is that the financing company uses the commercial credit of your client (who is paying the invoice) as part of their decision process. This makes it a viable solution for companies whose major strength is that they work with creditworthy clients. Additionally, most invoice financing lines can be setup in around a week, making it an ideal situation for companies that need funding quickly to cover an emergency.

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Manage Finance

Is The Wrong Type of Equipment Finance Company Bad For (Business) Health?

They are all the same, aren’t they? Absolutely, positively… not! We are of course talking about the equipment finance company industry in Canada and how your selection of the right partner can determine which advantages and disadvantages you can enjoy… or suffer with. We prefer positive advantages that your business can benefit with, not Canadian business financing decisions that you will suffer via the wrong choice of a lease partner for your specific needs.

Ok, so what in the heck are we talking about? Essentially there are four types of asset finance partners in the equipment leasing industry in Canada. And you thought that a lease finance company was a lease finance company!

The first type of partner is the ‘captive’ – no you are not the captive! The term refers simply to finance companies that are owned and literally situated within various manufacturing firms. When clients ask us about lease finance options and they mention specific equipment we are always reminding them to ensure they determine if the manufacturer captive finance firm offers asset financing. If they do we can assure you it is probably the best financial terms you will be able to come up with, as well as a better chance for overall approval re rate, structure and other general terms. Why is that?

It’s to do with motivation – the captive finance firm is motivated to finance and promote the sale of products using financial options such as leasing to get the products out to the marketplace. Want to know a secret that should surprise most business owners and financial managers? It’s simply that captive finance firms in a competing industry will finance their competitor’s products, often at better rates, terms and structures. That is simply because the financial transaction will probably give the competing mfr a foothold into your business to promote and sell their own products. So don’t think that a great firm such as IBM CREDIT CORP. is the only firm that will finance your products you purchase through them. Others will also!

The second main group of asset finance firms in Canada is our chartered banks – Two major banks have leasing arms that are very significant, others employ lease finance to varying degrees. Our real only comment here is that the credit bar is high and more often than not you have to be a customer of the bank to enjoy the great lease and finance structures they offer.

The third main category of the Canadian equipment leasing company market is actually the largest and most robust. It also requires the maximum amount of knowledge and navigation by Canadian business owners and financial managers. This is the Independent lease finance market, where there are tens of firms that offer lease financing based on various criteria of asset size, credit quality, geographical preference, industry specialization, etc, etc, etc.

You have a great choice with our category 3 partners, the independent finance companies. You can spend tens or hundreds of hours determining their credit criteria, additional collateral they require, the size of deals they do, the different lease structures they offer, or… alternatively.. use our final category for lease provider, the independent lease finance advisor who are knowledgeable intermediaries who know the market, have a strong reputation with lease providers, and can match the advantages you seek in an equipment finance transaction to the right provider. Subtle nuances in your overall lease structure, depending on the size of your transaction, can save you thousands of dollars and untold grief at the end of the term of your lease.

So that’s your Canadian lease market overview. Speak to a trusted, credible and experienced Canadian business financing advisor who can successful guide you through the asset finance maze.

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Entrepreneurs Manage Finance

Entrepreneurial Management – How to Create Your Favorable Financial State and Influence

An entrepreneur is one who is successful in business. To lead the kind of life you want you should command a favorable financial state and you can do this through entrepreneurial management; the ability to create a business and be your own boss. The more people own their own business in a country, the better and safer the country will be; people who have a stake in their nation and community are its best citizens. A well-run business can generate unbelievable profits, outperform any other source of gaining wealth and surely bring you fame. Build a solid foundation for a business in order to build great investment for your future.

Entrepreneurial management demands you bring to stage your wits and wisdom to make things happen in exceptional ways. Before you start your journey to riches, you must take inventory of your current situation. The goal in wealth building is to do things far beyond your current demands you motivate yourself, go outside your comfort zone to maximize your abilities and potentials. In order to succeed in what you do, you need to expand your thinking outside your reality zone and aspire for greater heights. This is an ageless and timeless concept that I discovered in the life of all successful entrepreneurs. They strengthened their ability to manage and lead the affairs of life.

Are you ready to take absolute control of things and bring yourself to a focus with the rightful state you desire? Build assurance through concentration, affirmation and harnessing your skills in line with what you aspire for. Plant the seed of greatness in your mind and fertilize it. What is the degree of your idea power? Idea is the life blood of entrepreneurship. Fill your mind with reliance and also fill it with positive thoughts that paint your passion and produces productivity. Take a detailed look at your current reality and form a clear picture of where you would like yourself and your business to be in future. Define your niche, be smart, identify your customers and give them the best of services.

 

The secret of successful entrepreneurial management is to love what you do. The entrepreneurship lifestyle is for those who have the great mind to stand tall even in difficult situations. To make things easier for you, raise people and mentor/coach them to run the business and you have time for other things. Establish a good relationship with people. Once you are making a lot of money from your business, use the income realized to invest in additional assets in order t make more passive income. If you are in a paid job, I advice you not to quit your job when you are just starting your journey towards your entrepreneurship dream. You need that salary to help leverage your way to success in your entrepreneur goal. Synergy is the sagacity you need to make things happen faster and in a greater way. Partner with like-minded visionaries. Re passionate about the business you are in. this creates motivation and keeps going even in front of difficulties. Establish your entrepreneurial management capacity and create your favorable financial state to be a person of influence in this day and age.

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Manage Finance

Financial Advisors and How to Choose Them

Don’t know stocks from bonds? Not sure how mutual funds compare to ETFs? Money can be confusing, but you can’t afford to stay confused.

When in doubt many people turn to a professional advisor. There is certainly no shortage of people willing to tell you what to do with your money, financial advice is one of the growth professions of the new millennium, though its reputation often fails to inspire confidence. This article helps you make the most of the mass of advice available.

There are various types of advisor.

Tied advisors work for a particular institution and only advise on that institution’s products. Tied advisors will not necessarily advise on the best deals available (unless they just happen to be provided by their employing institution). If (and it’s a big if) you use tied advisors, be sure to compare quotes from 3, 4 or however many you have time to go to.

 

Independent advisors advise across the whole spectrum of available products. They should find the very best deal for your needs.

Independent advisors are paid in 2 ways:

  • Commission based – advisor earns commission from products they recommend
  • Fee based – client pays advisor’s fee, advisor refunds part/all commission to client

Commission based advisors charge nothing for their time, but they may have ulterior motives (ie higher commissions) for recommendations.

Important points in making your choice:

  • Is the advisor licensed?
  • Does s/he belong to the relevant professional bodies?
  • Is s/he bound by any code of practice?
  • How long has he/she been in business?
  • Has he/she been recommended by trusted friends/associates?
  • Can he/she provide references?

Ask around. The effectiveness of a financial advisor is difficult to gauge until some time after their advice is given. Do your friends recommend a particular advisor? Why?

Advisors can assist in the financial planning and investment process, but always remember it’s YOUR money at stake. The best advice is not to delegate your money management decisions to a (disinterested) 3rd party. Instead make just a little time and effort to acquaint yourself with the available choices. And – should you choose to use one – do this BEFORE consulting a financial advisor, ie you should have a pretty good idea of what you’re looking for before the meeting. Ask your advisor difficult questions – and lots of them.

Avoid signing up for anything there and then. Always sleep on decisions, even if that means the opportunity is lost. There are few opportunities so golden that they won’t exist next morning.

Some advisors are guilty of “blinding with science.” Don’t invest in anything you don’t understand. The advisor’s job is to advise. Your job is to listen carefully and then make YOUR decision.

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Manage Finance

Financing Your Business Acquisition Should Be the Least of Your Concerns – Think About Choosing One

At this point in the article, you should feel confident about getting into a new business without using any of your own cash. Then there’s the obvious question: “Where am I going to get the money for the rest of the purchase price?” Coming up with a way to cover the $100,000 down payment on a $500,000 deal seems relatively easy once you know all your options and opportunities. However, getting the remaining $400,000 can be a more difficult task to accomplish. To your big surprise, it is not. Like the process of arranging no cash down, the methods of paying for the rest should not be a concern. Let’s begin with this simple thought: if you think of money as a commodity, or product, you’ll have an easier time finding it, asking for it, and getting it from those who can afford to lend it. Many people have these resources to lend to you. All you need to know is how to ask for it the right way.

Question: Whose door should I knock on first?

Answer: You may already have your foot inside that door. That’s because, as I’ve mentioned before, the most likely source could be the seller. In fact, before you consider any other funding source, discuss the prospect with the seller. (Later, a few other avenues of financing will be discussed, in the event that the seller is not cooperative with your pitch techniques.) Borrowing from sellers typically offers some key advantages:

1) Sellers are not fanatical about earning interest. Their objective is actually to sell their business at a price they feel most acceptable. The seller wants to get rid of their business for a reason, whatever that might be. This may be to get rid of a financial burden, and for you, an opportunity to put into practice your management expertise to transform the same business into a towering mountain of profit.
2) Sellers can be far more understanding than banks. Let’s say your new business has a slow couple of months, and cash flow has become more like a cash trickle. So now you’re forced to miss a payment, or even two. Which lender is more likely to penalize you-the bank, or the person with whom you’ve formed a solid relationship and who can empathize with your business problems? I am sure that you and I share the same answer.
3) And no, sellers won’t take away your personal assets. Whereas most banks are obsessed with collateral, sellers rarely demand the same. Yes, they may want you to put security interest on the business, but beyond that, a handshake will often close the deal.

Question: If seller financing can’t be worked out, should I simply go to my bank?

Answer: Actually, the ideal bank may be the one the business is already using. They know the business and if the seller can introduce you to his or her long-time banker, it could facilitate the transition of ownership. However, you can also apply at any commercial bank for a business acquisition loan. As you might imagine, though, there’s much more required of this kind of transaction than filling out an application like you would for a car loan. They want to know a lot more about you and your chances of success before they approve the loan; and of course, that depends on your credit history and management skills. One thing you must remember is not to beg. You should never go into any financial institution, “hat in hand”, to plead for a loan. As intimidating as banks can be, they’re really just money supermarkets with shelves full of a commodity they want you to buy.

They need you as much as you need them. If you have a deal that makes reasonable sense, they’ll go along with it and make plenty of money from you. If you come into the bank with an idea for a start-up company, a good business plan is required as well. Solid projections will also be needed as part of the package. Using the business plan, the bank can analyze the feasibility of the venture and will decide accordingly.

Question: You mentioned “business plan” early in the article”. What kind of information can I submit to the banker that can be relevant to what he’s looking for?

Answer: Here’s what you can find in a business plan that will help you gather the necessary information for the banker.

Elements of a Business Plan: cover sheet, statement of purpose, table of contents, description of the business, marketing, competition, operating procedures, personnel business insurance, financial data, loan applications, capital equipment and supply list, balance sheet, breakeven analysis, pro-forma income projections (profit & loss statements), three-year summary, detail by month, first year, detail by quarters, second and third years, assumptions upon which projections were based, and pro-forma cash flow.

It is also necessary to present supporting documents to the business plan. A banker will need to see them before even considering you for a loan.

Some supporting documents are: your tax returns for last three years, your personal financial statement (all banks have these forms), in the case of a franchised business, a copy of franchise contract and all supporting documents provided by the franchisor, a copy of the proposed lease or purchase agreement for building space, copies of licenses and other legal documents, copies of resumes of all principals, and copies of letters of intent from suppliers.

Question: Is there a difference between a marketing plan and a business plan?

Answer: Marketing plays a vital role in successful business ventures. How well you market you business, along with a few other considerations, will ultimately determine your degree of success or failure. The key element of a successful marketing plan is to know your customers-their likes, dislikes, expectations. By identifying these factors, you can develop a marketing
strategy that will allow you to arouse and fulfill their needs. Identify your customers by their age, sex, income/educational level, and residence. At first, target only those customers who are more likely to purchase your product or service. As your customer base expands, you may need to consider modifying the marketing plan to include other customers. In report # 8, a sample of a marketing plan is included to give a more detailed idea of its components.

The business and marketing plans are both necessary tools to help you obtain a good idea of how you should pursue your future business. However, if you are looking for a loan at the bank, the business plan should be enough. The marketing plan can be useful when presenting it to business brokers, venture capitalist suppliers and of course, the seller. Since many businesses are seller’s finance, he will be curious to see what are your ideas that will enhance the sales of the business. By doing so, his shares of the business will increase in value and will be comfortable when you’ll take over.

Question: Can you describe in more detail some elements found in the marketing plan?

Answer: My pleasure. A marketing plan is necessary to direct your new business in the path of success. Consider it like your bible. It will help you target the market, or as we said previously, carve your niche. The marketing plan will help you answer the following questions: How you can position yourself with your competitors? How is your product perceived by the consumers? How should you establish a price for your product? Who will distribute your product? How will you promote the product to the public?

In your strategic situation summary, you should summarize the key points from your situation analysis (market analysis, segments, industry, and competition) in order to recount the major events and provide information to better understand the strategies outlined in the marketing plan.
The second section of the marketing plan should include the targets and objectives. This section explains how to define the market demographically- geographically in social and economic terms. Each market target should have needs and wants that differ, to some degree, from other targets. These differences may be with respect to types of products purchased and the frequency of purchase. Objectives should include the following program components:

1) Product
2) Price
3) Distribution
4) Promotion (or sales force)
5) Technical services

As for the third section of the marketing plan, here you will provide the position statements that will help you describe how you want each market target to perceive each product relative to competition. State the core concept used to position your product (brand) in the eyes and mind of the targeted buyer. The position statements should describe:

1) What criteria or benefits the customer considers when buying your product along with the level of importance.
2) What you offer that differentiates your product from competition.
3) The limitations of competitive products.

All these details gave you a general idea on the content of a marketing plan. The most important segments are as follow:

Product strategy:

o You’ll need to identify how each of your products fits the market target. Other issues that may be addressed would be new product suggestions and adjustments in the mix of existing products.
Price strategy:
o The overall pricing strategy should be identified along with the cost/benefit analysis. Identify what role you want price to play, increase share, maintenance etc…
Distribution strategy:
o Describe specific distribution strategies for each market target. Issues to be addressed are intensity of distribution, how distribution will be accomplished, and the assistance provided to distributors.

Promotion strategy:

o Promotion strategy is used to initiate and maintain a flow of communication between the company and the market target. To assist in developing the communication program, the attributes or benefits of your product should be identified for each market target.
Marketing research:
o Describe the market research problem and the kind of information needed. Include a statement that addresses why this information is needed.

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Manage Finance

Options on Financing a Business Via P O Financing and Inventory Financing

It’s a good news/bad news situation at its classic best. Your firm has the ability to receive orders or contracts but you are challenged with restrictions or unavailability of inventory and PO (purchase order) financing. Financing a business based on assets such as inventory and orders in coming has never been more of a challenge in Canada.

When we speak to clients we advise there is no one method that seems to handle all inventory and P O finance challenges. But the good news is that via a variety of effective business financing tools you can employ you are in a position to generate working capital and cash flow from these two asset categories. Let’s examine some real world strategies that have made sense for clients.

The root of the problem is simply, you have orders and contracts, but those will potentially be lost to a competitor. Conventional wisdom is that you go to your bank and ask for financing to support inventory and purchase orders. As you may have experienced, we aren’t big believers in conventional wisdom on that matter!

However, utilizing a convention purchase order funding source does allow you to purchase product and get your suppliers paid, thus facilitating you ability to deliver to your customers.

One of the main benefits that many clients don’t realize is that inventory financing and P O financing don’t necessarily require your firm to have a long or strong credit history; the focus on structuring the transaction is around the inventory being financing and the general credit worthiness of your client, who will be paying yourself or the inventory or P O financing firm

The overall process is fairly simply and easy to understand when it comes to putting the transaction together successfully. On receipt of your confirmed purchase order your supplier is paid via cash or a letter of credit. Your firm of course completes final shipment of the product, which typically involves some additional time on your firms part. On shipment and of course payment from your customer the transaction is in effect settled. In a true pure po financing scenario the P O funder is paid immediately on your invoicing of the product. That is facilitated by your firm selling the receivable via a factoring type transaction as soon as you have generated the invoice.

There are always limitations to this type of financing – so things we look for early in the transaction are the ultimate remarket ability of your product in case there is a transaction risk. Naturally, as we stated, the overall credit worthiness of your customer is key, his receipt of goods and payment in effect closes the transaction.

Inventory financing and PO financing are generally more expensive than traditional financing, due mainly to the significant transaction risk that the lender takes. Therefore we strong recommend that your firm has solid gross margins in the 25% range to cover the associated costs of a po financing, inventory financing transaction that also factors in the time it takes to get paid by your client, as that typically adds 30-60 days on to the whole cycle of the transaction.

If there is one great tip of ‘ secret’ that we share with clients its simply that the best method of ensuring financing in the manner we have outlined is to consider an asset based line of credit. Coupled with a facility that will finance your purchase orders this is the ultimate working capital tool that will allow you to grow business quickly and significantly. This type of facility is generally a non bank facility and is offered by independent finance firms.

Speak to a trusted, credible and experienced Canadian business financing advisor who will assist you putting together a working capital and cash flow solution that works!

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Manage Finance

Are Working Capital Loans What Your Company Really Needs? What Type Of Finance Company Can Help?

The shock has probably worn off by now. We’re referring of course to the business owner and financial managers realization that sales don’t equal cash flow and that your management of working capital might just be your key to short and long term survival.

So what type of finance company or institution can help you in the access to liquidity? The reality is that every industry needs a different level of working capital. That relationship of your assets to your turnover to your cash on hand is what is going to make the final call on what type of loans you might need for your cash flow management solution.

And we will add that you might find that ‘ loans’ or bringing on additional debt to your balance sheet is not only the wrong solution, but you have alternative non loan solutions!

The reason you are looking at your working capital situation hinges probably on two areas, your firm is growing too quickly, or you have asset management challenges or problems with inventory and receivables. So hopefully you can now see that what working capital management is all about comes down to matching the financing you need to the assets and equity you have on your balance sheet. As your business and profits grow the owner equity component grows also

So are loans the solutions to your cash flow challenge (or crisis?!). Sometimes, but definitely not all the time. The long term solution to a cash flow management solution might in fact be a working capital term loan, in effect injecting long term capital into your business. If you can qualify for this loan, which is more often than not unsecured, it certainly is an option. Larger loans of this nature are called subordinated debt, but cash flow term loans are available for almost all firms – generally the minimum being 50k, but as we noted, going to several million dollars depending on the size of your firm.

But why would you borrow externally and bring debt onto your balance sheet when the solution is inside your business, not outside? Clients are often surprised when they find out that two other solutions, and not loans, are possible.

We’re talking about asset based lines of credit, which are generally non bank in nature, meaning they are offered by private finance firms. Rates on such facilities can be competitive to bank rates, but more often than not come at a premium. However your ability to, in many cases, double your working capital liquidity can significantly increase profits and sales. Just think about it, if you can double sales, keep your overhead costs relatively fixed, the additional profits you generate can easily cover your new increased financing costs.

The other solution we will mention is the sales of receivables. This type of financing brings zero new debt on to your balance sheet, improves your cash position, and provides immediate cash flow for growth. Perceived as expensive and non traditional it is gaining traction with Canadian business every day. In effect it is the trade off you have between growth and survival and additional financing cost, of a non loans nature.

In summary, working capital loans can come from external finance company sources. Alternatively you can become your own finance company by managing and monetizing your assets in a variety of ways. Speak to a trusted, credible and experienced Canadian business advisor to determine which solutions work best for your firm.

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Manage Finance

Financial Management and Budgeting in Business

Importance of Financial Management

Finance is a key functional area of business management. This area is commonly referred to as Financial Management. The term defines the achievement of key financial objectives by making investment and financial decisions. Essentially, it is the management of all the processes associated with the efficient acquisition and deployment of both short and long-term financial resources. Financial Management assists an organisation’s management to reach its financial objectives such as the creation of wealth, solvency, liquidity, growth and return on investment achieved through a process of financial planning, control and decision-making.

Financial Control

Financial control consists of different strategies to manage finances necessary to achieve the primary purpose of every business; which is to earn profit. Budgets are the traditional financial control method and provide a measuring basis which performance can be assessed. By engaging in a yearly budgeting process a business can make plans and forecasts for the year ahead. Control action should be taken when actual performance appears not to be matching the outline of the budget. Therefore by monthly monitoring of expenses, controlling methods can be put into place when expenses becoming higher than figures stated in budget (such as spending cut backs or extra working hours). And by determining the reasons why figures do not match the yearly budget plan, a business can therefore make necessary plans for this not to occur in the future. Monthly monitoring of expenses is another example of a financial control. Such data includes cash balance, total wages costs and hours worked key sources of income, unusual or above budget expenditures.

 

Three Main Financial Statements

The 3 main financial statements necessary to analysis and improve on finance viability:

1) Balance sheet – ‘A statement of financial position that shows the assets of a business and the claims on those assets’

2) Income Statement – ‘A financial statement (also known as profit and loss account) that measures and reports the profit (or loss) the business has generated during a period.’

3) The cash flow statement – ‘A statement that shows the sources and uses of cash for a period’

By analysing these three financial statements on a regular basis a business can proactively forecast problems or opportunities before they arise. The 3 main financial statements are also considered as financial controls as these statements are used to understand and interpret the financial conditions of a business as a means of management and control. The statements enable a business to set guidelines and policies that enable growth and business success. An annual Profit and Loss statement is considered the most important financial statement and UK businesses are legally required to lodge a Profit & Loss Account with Companies House. In regards to cash flow, cash inflows are payments for products or services and interest on savings and investments. Cash outflows are a combination of many things including purchasing stock, daily operating expenses, fixed assets and government taxes. A business is also required to produce a balance sheet annually for reporting purposes. It provides a report of assets or liabilities.

Budgeting and Budgetary Control

A budget as a qualified statement, for a defined period of time, which may include planned revenues, expenses, assets, liabilities and cash flows. It is a short-term plan of working towards financial objectives. There are several styles of budgeting, these styles include –

* Fixed – does not allow for variations

* Flexible – Adjusts or flexes

* Continuous or rolling – continually amended

* Zero-based – needs assessed

* Incremental – uses previous budget with increment

Budgets are necessary to provide a basis for control, helping identify short-term problems and promote forward thinking. However, there is a need for budgets to be adaptable if they become unrealistic due to sudden changes in the business environment. This is known as ‘Flexing the Budget’ (which simply means revising the budget).

A variance report is required to indicate whether performance is below or above the budgeted level. It is the difference between the budgeted level of costs and revenue and the actual levels of costs and revenues also referred to as variance analysis. Budgets can also have a behavioural effect motivating the management team and staff to achieve better performance and help promote forward thinking.

Effective Business Planning

A business plan is made up of many elements but no business plan is complete without this financial information. For business planning to be effective, the budget and the three main financial statements (Profit & Loss, Balance Sheet and the cash flow statement) must be taken into consideration. A financial statement is the core of a business plan as they are used to identify various business strategies. Financial planning is interlinked with all elements of a business plan. Five key strategic plans interlinked with a budget (plan); 1) establishing mission and objectives, 2) undertaking a position analysis, 3) identifying and assess the strategy options, 4) selecting strategic options, 5) perform, review and control. By taking all of these elements into considering, a business can create an effective business plan containing financial data and projections.

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Manage Finance

Choosing The Right Receivable Financing Company

The very mention of the term “bank loan” to a business owner is often enough to elicit a very strong and visceral response and the simple truth of the matter is that the average business bank loan is a fairly contentious and controversial subject within the business community. On one hand, a bank loan will provide the business owner with a source of capital that they otherwise would not have, which in turn can mean that bold ambitions of expanding and developing the business in a particular direction can be more fully achieved and accomplished with a minimum of disruption.

This is especially significant in highly competitive sectors of the market, as any measure of delay can ultimately result a business that chose to postpone any sort of development or alterations to the manner in which they do business being overtaken by a rival. The downside here however, is that the loan will be required to be paid back and so if the business is struggling to generate enough revenue, or worse yet, is already in debt, then the repayment maybe too much of a burden for its finances.

Furthermore, in order to actually gain access to a bank loan, a business will typically be required to secure assets that it owns as collateral, and so a noncompliance with the terms of the loan will ultimately mean that the assets secured as collateral maybe seized by the lender.

Thankfully, there is an alternative strategy for the struggling business owner who is looking to secure another external source of capital finance to provide their company with a much needed kick start: a receivable financing company.

A receivable financing company, or a factoring agency as they oftentimes referred to within business parlance, is a business entity that will purchase outstanding invoice accounts from a company and then provide the client company with a sum of money upon receipt of the invoices. The receivable financing company will then assume full, legal responsibility for the collection process of the money owed by the client specified on the invoice.

Once the client has paid the full balance owed to the receivable financing company, the factoring agency will then release the remainder of the funds owed to the client company….with a small deduction made from the funds received from the client in order to cover the expenses that they have incurred.

One of the major benefits of using a factoring agency is that the client company will be guaranteed to receive a fairly large amount of money in a very short space of time indeed which effectively eliminates and protects against the risks that an unpredictable and capricious degree of cash flow will pose to a client company.

Furthermore, this method of business financing will effectively mean that the agency is responsible for the collection process thereby freeing up the time and money of the client company who will not have to contend with the chasing up of fees or commissions owed.

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Manage Finance Products Business

UK Finance for Business

Running a business and becoming successful in that venture requires a lot finance and financial assistance. In UK finance for business can be got from different sources. Business related financial services are provided by many organizations in that field. UK finance for leasing a company or organization, UK finance for debt collection, UK finance for Venture Capital can also be arranged.

There are companies that help a business in hire purchasing and arranging for leasing. You can approach such dedicated companies for such services. UK Finance for hardware funding for the information technology business is also available in companies. Leasing services for small businesses, agricultural and industrial funding operations are available in companies dedicated to that service. A company called Richard Mares Asset Finance in UK finances for agricultural and industrial setups. If you need information on UK finance for equipment leasing, mortgages and commercial finance then you can approach companies like 1st Leasing Company and 1pm.co.uk. Many options for UK finance are available with them. Just check out their website for more details on the different types of finance available with them. For UK finance from £5,000 upwards you can approach companies like 1pm. They work closely with their clients to provide what they need.

UK Finance for companies in the information technology sector can get their financing options from companies like Corporate Computer Lease Plc in UK. Such companies make IT more affordable and you get the UK finance for almost any technology spends. They have successful records of financing in UK for even Fortune 500 companies. This is one of the fastest growing UK finance companies.

Companies like Corporate Business Finance fund you for Plant, Machinery and for other corporate financial services. They provide finance in UK for many services like hire purchase, leasing, operating leases, factoring, release of capital, and commercial mortgages. Each and every business may need a unique funding requirement and it is a tedious task to arrange for funding when you need to run your business. A lot of time is wasted in searching for proper funding. Under such circumstances you can approach companies like these for UK finance for your funding requirements.

For new start ups it is difficult to get finance in UK or elsewhere. Most of the finance companies will fund only the established businesses. But companies like Oak Leasing help even the start ups since they understand the difficulties that the startups face. The problems that the start ups face are only initially. If they have a proper business plan they could come up. The team at Oak leasing would finance your startups and for any new equipments that you need. More details are available in their website.

There are companies that fund only the big companies. Finance for big companies is given by UK finance companies like the Benington Securities. It is a private enterprise brokerage. They cover only the corporate investments. There are many companies that provide UK finance for even individuals. Companies like Troman finance provide funds for the individuals and small business firms.