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How regular finance reviews could increase your business cashflow

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Getting your hands on enough cash to keep business growth healthy can be tough, to say the least. New order fulfilment and stock purchasing are crucial, and it only takes one late customer payment to knock everything off balance. Raising the extra capital needed to buy new equipment or launch new products can be just as tough.

Simon Belton, specialist finance broker for the print & signage industries, visited the Vantage blog to share his tips on using alternative finance options. He has spent 30 years’ in the finance sector and has structured and managed facilities for a multitude of companies across the sector.

He reveals why alternative finance options may be better for business growth and cashflow, and why regular finance reviews are so important.

Why it pays to review your business finance options

When you need to increase cashflow, your knee-jerk reaction might be to plunder your bank overdraft, but if you’re an SME or want more flexibility in your borrowing, Simon advises against it.

Simon says, “The banking environment is experiencing significant change. Banks are looking to increasingly standardise their offerings and are moving away from a relationship-based model. For larger ‘vanilla’ businesses who are trading well, the banks will continue to offer a good solution. However, if a company needs more flexibility, and wishes to have immediate access to a finance professional, then there are more suitable lenders out there.”

As with phone contracts and energy suppliers, regularly reviewing your business finance options might save you extra money while increasing your borrowing amount.

By teaming up with a finance broker, Simon says there are two main ways a business can come out on top:

  1. The finance broker goes to market and comes back with two or three alternative options which a current lender can match.
  2. The finance provider goes to market, comes back with two or three alternative options which a current lender can’t match, prompting a switch and save.

Because a finance broker’s fee comes from the lender, their services are usually free to use. According to Simon, commercial finance lenders are becoming more competitive on price and offer a wider range of business finance products and packages—another win for your business’ bank balance.

How often should a business review finance?

Although some lenders claim that an annual review is needed, Simon advises that this isn’t necessary. “I believe that a company should go to market at least every 3 years,” he says. “The finance market evolves quickly and there are always opportunities to improve pricing, terms and ease of use.”

Once the process is underway, Simon says it’s relatively straightforward and advises that a new facility could be in place within a fortnight. “There is an initial meeting with the prospective lender, a probable day of due diligence (depending on facility size) and following an internal credit meeting documents can be signed.”

Outside of bank overdrafts, what other finance options are there?

According to Simon, there’s a multitude of commercial finance lenders on the market. Each of them offers a range of business finance products to help SMEs buy or refinance equipment, make one-off stock purchases, cover occasional costs and much more besides. Some of these products can be packaged together for an even better deal but sifting through them often takes an expert eye. Simon advises using the free services of a finance broker to find the best fit for your business, to take the legwork out of making a comparison to your current finance option and —if necessary—to make the switch.

The expert jury is out—relying on the bank may not be the best cashflow option after all! With so many alternatives around (and free consultation up for grabs), many print businesses may find that they’re able to reach new growth by reviewing the finance they already have and using the right partner to keep an eye out for a better deal.

You can start exploring your finance options by getting in touch with Simon for a no-pressure, free and confidential chat.

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