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Are you starting to panic about business cashflow or invoice funding?

I have been wondering whether there are people out there who have businesses who are starting to panic a little bit about their financial situation.

Now, this could be a growing feeling of concern that your cash flow is going to stall, or maybe you have noticed that the cash is not moving around your business as it did before the Coronavirus pandemic. You might have the growing realisation that you are going to run out of cash before you actually start to get money coming back in through the door.

Raising Invoices

Or it could be that you are raising invoices, but you are not getting paid as quickly as you would like to get paid.

So, you are wondering how you are going to pay your own bills, or it just could be that you don’t have any cash reserves?

As a result of not having any cash reserves, you have no confidence in terms of being able to meet your commitments going forward.

If this is the case, then we may have a solution for you, and it is a solution that I have used in the past in previous businesses to ensure that the cash keeps flowing, and that cash flow solution can be a life saver.

 

And if it is a life saver and we can help to save more businesses from going out of business, then that is why I am here.

So, if you do have a requirement to even just talk to somebody about it, because the worst thing you can do really is to bury your head in the sand and think that everything’s going to be fine, and it will go away.

It probably will not go away, and it will need to be addressed.

Review your businesses financial plan

Now, whether it is addressed with reviewing your financial plan and your costs or whether it is by putting a solution in place, something needs to happen.

Contact us today so that we can help you set up a plan and work out a solution to keep the cash flowing through your business.

 

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What’s the difference between an Overdraft and an Invoice Finance Facility?

I have been getting asked recently ‘What is the difference between an Invoice Finance Facility and an Overdraft?’

Well, here is the answer. An Overdraft is the most commonly used form of short-term finance, with 16% of SMEs in the UK having one. An overdraft has an arrangement fee to put in into place, you pay interest when you’re using it (no interest when you’re not), and it’s a short-term facility – generally 12 months and renewed at the end of the year.

So if you’re constantly at the limit of your overdraft facility, then there is always the danger that it could be construed as a long-term debt rather than a short-term facility and the bank could ask you to repay that, potentially by putting it into a term loan. At
which point, the benefit of having the overdraft, in terms of no capped repayment requirement and no monthly cost, is superseded because the loan now has a monthly repayment.

The alternative to that, as is often put forward and is a very different kind of facility, is the Invoice Finance Facility.

The Invoice Finance Facility provides you with money upfront on your invoices, before you get paid by your customer.

There is a monthly management fee which needs to be paid on the facility, and you pay interest as and when you are required to borrow money against the invoice. So, if you’re not borrowing against an invoice, then you’re not paying any interest.

I guess the best way to look at it is to compare two companies. So, if we’ve got two companies that are look to grow – company 1 has an overdraft and company 2 has an Invoice Finance Facility.

Now, company 1, when it grows, will grow using its overdraft facility, which is a set amount of money, and it will get to the overdraft limit and find that it starts to run out of cash as it tries to grow through that glass ceiling. So, it will need to go back to the bank and renegotiate the overdraft facility or potentially take out a loan in order to get to the next level of growth.

And then it may use up that finite amount of money as it continues to grow, and once again, it will have to do the same thing again and go back to the bank and try to renegotiate a new deal.

Whereas company 2, they have an Invoice Finance Facility. As they start to grow, they raise more invoices. The invoices then have money provided against them by the lender providing the Invoice Finance Facility which allows them to continue to grow, because the facility grows with them. It’s not the case of needing to renegotiate the facility every time the company grows, or needs more cash.

So an Invoice Finance Facility is a much more powerful way of actually growing your business without having to constantly worrying about reaching a predetermined limit set by the bank.

All that needs to happen is the business keeps growing, keeps selling, and keeps making a profit and the facility will grow with it. It’s a very powerful way of using the cash within a business in order to grow.

I’ve talked a lot about these facilities being very good for the survival of a business, which they absolutely are, but they are also very good for growth. I also think that they are very misunderstood in the market. The reason that I say that is that less than 1% of all UK businesses have an Invoice Finance Facility in place.

If you would like to get in front of other businesses by using an Invoice Finance Facility, if you have any questions, or would like the Financial Health of your business assessed, get in touch today and we can open a conversation.

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How far in advance should you plan your commercial finance solution?

Today I’m going to talk about the timescales involved for Tier 1, Tier 2, and Tier 3 commercial lending and commercial mortgages.

In terms of putting a case together, getting it submitted, getting a decision in principle, getting it credit backed (underwritten), and then the time it takes to go through the legal process in order to draw down the funds.

Timescales for commercial lending

The purpose of this is really just to give you an idea, if you’re looking to buy a commercial property, either as an investment, or for owner operation, or even a trading business, then these are the timescales that you are going to be looking at.

I’m going to break it down into tier 1, tier 2, and tier 3. This is slightly different to some other areas where tier 1 is actually going to be a Business Development Manager (BDM) that you’re talking to, so you are actually talking to a person, whereas tier 2 and 3 tend to be more portal based, particularly tier 2 – where it is either meeting criteria, or it isn’t. Tier 3 depends on the lender, but some lenders will be BDM and some will be portal.

 

So, on to the timescales. For a decision in principle for a tier 1 loan, using a BDM, you will most likely be looking at one to two days. For a tier 2, even though you would apply through a portal, you would still be looking at one to two days. If you were processing a tier 3 loan, you could have a decision in principle back in as little as four hours, though this could go up to two days. So, for all three tiers, it is best to err on the side of caution and plan for the process to take up to two days.

If you then want to get that decision in principle credit backed, because you are happy with the deal that’s offered, then that process can take up to 4-5 days, depending on how quickly an evaluation can happen, and then from evaluation and credit backing, the timescale to actually draw down the funds varies.

For tier 1, you can look at drawdown taking ten to twelve weeks, tier 2 can be eight to twelve weeks and for tier 3, you can expect it to take eight to ten weeks.

If you are thinking of going through this process, ideally, you should attempt to plan anywhere between three and a half to four months ahead of the time that you want the process to be completed. There is, of course, an option if you want to do it quicker.

You can look at Bridging Finance (which will be the topic of next week’s blog), so if you are unable to secure it within the time scale of the three and a half to four months, as long as the ability to refinance was there, you would be able to secure the asset quickly.

A lender for a bridge would want to know what your exit strategy for the finance was, and your exit would be to refinance. As long as you are able to show that you are able to refinance, then the bridge should be forthcoming.

If you want to discuss these or other business finance options, get in touch by filling out the contact form on this website and we can work out what solutions will fit your needs.

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Security Guard Companies and their funding gap – how are they going to fill it?

Some of my Security Guard company clients have been asking me how they can bridge the financial gap between the downturn of trade and when things return to normal.

 

Hi, my name is Graeme Shevas.

I help Scottish Security Guard Companies who are having problems with their cash flow, to release cash from their sales invoices.

I’ve been in business for over 30 years and one of the questions that my customers have been asking me lately is ‘how do I get my cashflow moving now that other businesses are having trouble paying their bills?’.

Here’s my best advice:

If you’re a Scottish firm operating in the business-to-business sector, you’ll be raising invoices for your products or services. At the moment, your normal payment terms for those invoices will most likely be 45 to 60 days. You may have seen a drop-off in trade and the amount of money that you’re going to have over the coming months will be significantly reduced.

You may well have enough to get you through until the point where you can begin trading at normal levels again, but when you need cash to pay the bills as you return to normal trading levels, you’re going to have to wait another 45-60 days for payment. Therefore, the actual funding gap is going to be longer
than the business interruption.

How are you going to plug that gap?

This is where Invoice Finance and the Coronavirus Business Interruption Loan Scheme (CBILS) guarantee may be able to help. As soon as you raise an invoice you could have access to 85-90% of its value within 24 hours instead of having to wait the 45-60 days to get paid.

This will give you ready cash flow to allow you to meet your costs and thrive as we get back to normal.

This is something that I specialise in and my role is to make sure that you don’t need to go to lots of different providers. You only need to provide your information once and we will access the most suitable providers based on the sector that you’re in, your turnover, and how your business is doing.

It is a straightforward process to apply and it doesn’t cost you anything, my fee is covered by the provider.

For more information and to see how a flexible Invoice Finance orFactoring Solution can benefit your business, please call us today or submit an enquiry and we will contact you.

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Recruitment companies have options available to release cash from their sales invoices.

Hi, my name is Graeme Shevas.

I help Recruitment Companies who are having problems with their cash flow, to release cash from their sales invoices.I’ve been in business for over 30 years and one of the questions that my customers have been asking me lately is ‘how do I get my cashflow moving now that other businesses are having trouble paying their bills?’.

Here’s my best advice: If you’re operating in the Business to Business sector, you’ll be raising invoices for your products or services. At the moment, your normal payment terms for those invoices will most likely be 45 to 60 days. You may have seen a drop-off in trade and the amount of money that you’re going to have over the coming months will be significantly
reduced.

You may well have enough to get you through until the point where you can begin trading at normal levels again, but when you need cash to pay the bills as you return to normal trading levels, you’re going to have to wait another 45-60 days for payment. Therefore, the actual funding gap is going to be longer than the business interruption.

How are you going to plug that gap? This is where Invoice Finance and the Coronavirus Business Interruption Loan Scheme (CBILS) guarantee may be able to help.

As soon as you raise an invoice you could have access to 85-90% of its value within 24 hours instead of having to wait the 45-60 days to get paid. This will give you ready cash flow to allow you to meet your costs and thrive as we get back to normal.

This is something that I specialise in and my role is to make sure that you don’t need to go to lots of different providers. You only need to provide your information once and we will access the most suitable providers based on the sector that you’re in, your turnover, and how your business is doing.

It is a straightforward process to apply and it doesn’t cost you anything, my fee is covered by the provider.

If you think this may work for you, or have any questions, fill out the ‘Contact Us‘ page on this website and we can have a discussion about how we can help.

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Construction Industry and need assistance with your cashflow?

If you are in the Scottish Construction business and having problems with your cashflow due to unpaid invoices, we have a solution for you.

Hi, my name is Graeme Shevas and I help Scottish Construction businesses who are having problems with their cashflow to release cash from their sales invoices.

I’ve been in business for over 30 years and one of the questions that my customers have been asking me lately is ‘how do I get my cashflow moving now that other businesses are having trouble paying their bills?’.

Here’s my best advice: If you’re a Scottish firm operating in the business-to-business sector, you’ll be raising invoices for your products or services. At the moment, your normal payment terms for those invoices
will most likely be 45 to 60 days. You may have seen a drop-off in trade and the amount of money that you’re going to have over the coming months will be significantly reduced.

You may well have enough to get you through until the point where you can begin trading at normal levels again, but when you need cash to pay the bills as you return to normal trading levels, you’re going to have to wait
another 45-60 days for payment. Therefore, the actual funding gap is going to be longer than the business interruption.

How are you going to plug that gap? This is where Invoice Finance and the Coronavirus Business Interruption Loan Scheme (CBILS) guarantee may be able to help. As soon as you raise an invoice you could have access to 85-90% of its value within 24 hours instead of having to wait the 45-60 days to get paid. This will give you ready cash flow to allow you to meet your costs and thrive as we get back to normal.

It is a straightforward process for the application and there are no fees for me to do that, as they are covered by the provider.

This is something that I specialise in and my role is to make sure that you don’t need to go to lots of different providers. You only need to go to me and I will access the most suitable providers based on the sector that you’re in, your turnover, and how your business is doing.

I can save you time and get you the deal that will work for you.

I hope you found that useful. If you’re a Construction business based in Scotland and you need help with Invoice Financing, you can reach me on 07776 257 342, graeme@playfairfinance.co.uk or fill in the ‘Contact Us’ page on this website.

 

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Scottish commercial lending and releasing cash from unpaid sales invoices

Hi, my name is Graeme Shevas.

I help Scottish businesses who are having problems with their cash flow, to release cash from their sales invoices.

I’ve been in business for over 30 years and one of the questions that my customers have been asking me lately is ‘how do I get my cashflow moving now that other businesses are having trouble paying their bills?’.

Here’s my best advice: If you’re a Scottish firm operating in the Business to Business sector, you’ll be raising invoices for your products or services. At the moment, your normal payment terms for those invoices will most likely be 45 to 60 days. You may have seen a drop-off in trade and the amount of money that you’re going to have over the coming
months will be significantly reduced.

You may well have enough to get you through until the point where you can begin trading at normal levels again, but when you need cash to pay the bills as you return to normal trading levels, you’re going to have to wait another 45-60 days for payment. Therefore, the actual funding gap is going to be longer than the business interruption.

How are you going to plug that gap? This is where Invoice Finance and the Coronavirus Business Interruption Loan Scheme (CBILS) guarantee may be able to help. As soon as you raise an invoice you could have access to 85-90% of its value within 24 hours instead of having to wait the 45-60 days to get paid. This will give you ready cash flow to allow you to meet your costs and thrive as we get back to normal.

There are other ways of raising cash in the short-term, such as bridging loans or refinancing assets, but in my view at the moment, the longer-term solution would by your Invoice Financing provision. It is a straightforward process for the application and there are no fees for me to do that, they are covered by the provider.

This is something that I specialise in and my role is to make sure that you don’t need to go to lots of different providers. You only need to go to me and I will access the most suitable providers based on the sector that you’re in, your turnover, and how your business is doing. I can save you time and get you the deal that will work for you.

I hope you found that useful. If you’re a business based in Scotland and you need help with Invoice Financing, you can reach me on 07776 257 342, at graeme@playfairfinance.co.uk, or fill in the ‘Contact Us’ page on this website.