Confidential Director Advice 0800 644 6080 35 Regional Offices Throughout the UK. 8am to 8pm 7 days a Week

Need Help with Cash Flow Emergency Funding? - Business Finance and Funding Advice and Support

Written by Keith Tully

Are you having trouble covering daily operating expenses or paying monthly bills? Do you require additional cash flow in order to make crucial investments? We may be able to help you find the finance and funding you need to turn a profit.

We understand the need for businesses in the UK to raise operating capital for a number of reasons. Sometimes the company is on the verge of becoming insolvent and needs funds to fend off creditors, while at other times there's a real need to expand but cash flow is insufficient to allow for investments that could facilitate expansion.

Open Quote
There are many approaches to business financing through loans and funding which can be pursued to help raise the money necessary for long or short term needs.
Close Quote
There are many approaches to business financing and emergency funding that can be pursued to help raise the money necessary for long or short-term needs, even when a company is currently insolvent or has a poor credit score.

Our finance advice service can help you explore viable options to raise capital as quickly and efficiently as possible.

Here are just a few of the many ways in which a business can acquire much-needed funding and/or financing: 

  •  Invoice Discounting and Factoring

 If your clients have a history of paying in full and on time with consistency, then you may be able to utilise invoice discounting or factoring services to get a cash advance for your outstanding invoices. Both of these funding options offer very similar features, as both are designed to improve cash flow by providing access to invoice payments before your clients pay. The primary difference is that in a factoring agreement the lending company (commonly referred to as a  “factor” ) agrees to take responsibility for processing and collecting invoice payments directly from your clients, whereas in an invoice discounting agreement your company would still be responsible for collecting invoice payments from clients and then repaying the invoice discounting lender. Both services let you convert about 80%-90% of your sales ledger into cash at any given time.

A factoring agreement provides a line of credit that increases whenever you land a new invoice, so the amount available to you in the credit account stays at a set percentage of your current sales ledger, and you only pay interest on the amount withdrawn each month (similar to a credit card account). An invoice discounting agreement essentially lets you sell a future invoice payment at a discounted rate (i.e. - you sell a £10,000 invoice for £8,500), with the benefit being that you get the cash in advance. Invoice discounting is preferable when you need access to selective financing for a specific invoice or a batch of invoices (worth more than £4,000) without committing to an ongoing factoring agreement. 

Keep in mind that the terms of invoice discounting and factoring agreements will vary depending on the lending company and other factors. To get a more accurate depiction of what the services can do for your company contact one of our insolvency practitioners for free professional guidance. 

  • Loans and Funding for Businesses in the UK

 Finding a lender that is willing to deal with a struggling company is not always easy. Rates will usually be phenomenally high as lenders are afraid of losing their investment. However, banks are not the only lenders that provide small business loans, so seeking advice is in your best interest. This is a tricky subject because many subprime (second-chance, near-prime, non-prime) lenders have earned a great deal of criticism in the industry for the rates and payback schemes they promote.

Even so, there are reputable lenders who are willing to deal with companies that can show past viability along with the potential for future profits. Dealing with small business loans is where the average SME in the UK needs to seek help and advice, as it can be difficult to find lenders that are willing to deal with indebted companies, especially those with poor credit. From procuring a loan from a bank to advice regarding business angels, Real Business Rescue can help you understand the options available for your business based on a thorough assessment of your circumstances during a free consultation (0800 644 6080).  

  • Business Debt Consolidation Loans 

At Real Business Rescue, one of the first things we will look at is the kind of debt you have. Some of it may be due to HMRC whilst some of your suppliers may have gone unpaid for a time. Whilst your company may have several credit cards and other high interest loans, you may also be paying a mortgage at a much lower rate. It is possible to consolidate debt by refinancing a mortgage to pay off all or some of those higher interest loans. This is something we may consider, even though it would your company will still owe the same total amount this is misleading because the bottom line is that debt consolidation could save hundreds of pounds each month in interest rates and service fees alone

  • Small Business Government Grants

 Here is another area in which there is a potential to find money to start or grow a business. Unfortunately, there are a variety of small business government grants available, which is why seeking advice is always a good idea. Some grants are better than others for different industries and some may not even be available to the type of business you operate. Real Business Rescue can help you sort through potential government grants to see if there any are viable options. Types of government grants and funding that you business could be eligible for would include: 

  • Direct Grants
  • Soft Loans
  • Repayable Grants
  • Equity Finance
  • Best Practice Transfers
  • Subsidised Consultancy

These are just some of the types of funding and financing offered through government grants and initiatives. Since there are so many types of grants available, we can help you determine if your business qualifies for any available government funding. 

  • Floating Your Company 

According to Government, floating a company is a great way to raise venture capital whilst promoting a business on the open market. By joining one of the stock markets in the UK, your company becomes publicly traded, which provides the added benefit of increasing visibility and exposure. Sometimes this is all it takes to attract venture capital, even if your company is technically insolvent at the moment. However, be aware of the fact that floating a company does come along with some costs which need to be considered, and depending on your situation it may not be the best option for you

  • Asset Finance for Short Term Loans 

When a company is in need of a quick loan, asset-based financing can be an expedient route to take. In the past, invoice factoring and invoice discounting were the main types of loans under the broad umbrella of asset finance. However, in recent years more and more companies are borrowing quick, short-term loans against inventory or other assets to increase cash flow in the short term. Where invoice factoring and discounting are loans against the books, asset-based finance can be inclusive of securing a loan with company assets used as collateral. 

  • Completing Orders and Shipments with Trade Finance 

Companies in some industries face the problem of having insufficient credit established to order the goods necessary to complete an order. For example, a manufacturing company may rely on components as an integral part of the finished product. If there is insufficient credit with the supplier and no cash on hand to order the necessary parts, trade finance enables those parts to be ordered and paid for by the trade financing company. Credit is established with the financier as opposed to credit directly with the supplier. Trade finance is a strategy many companies in the manufacturing industry have utilised to satisfy large orders. 

Realistic Expectations from Real Business Rescue 

Our main mission is to help save companies that are about insolvent, and we recognise that finance and funding is integral to running a company and preserving its continuity. Even if your company is not in need of rescue but would like to foster growth, funding and finance alternatives can provide the capital your business needs to invest in ideal opportunities. 

In other words, we're not only here to give advice on financing for insolvent companies and those in distress, we can also recommend funding solutions that may help grow your business as well. Since finance is such a huge portion of saving businesses in the UK, we have made it our job to help our clients discover innovative ways to get the financing they need. 

Government wants your business to succeed because the stability of the economy depends on small to medium sized enterprises (SMEs). As a result, licensed insolvency practitioners are trained and legally obligated to offer honest and accurate advice on anything from financing to liquidation. 

Whether you're trying to save your company from liquidation or obtain the funding needed to facilitate expansion, our team is on hand to offer assistance. The initial consultation is free of charge so there are no worries there. Simply give us a call (0800 644 6080) or email us and let us help you find the answers to your financial concerns.

Keith Tully

Author
Keith Tully
Partner

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

Click Here to Meet our Team of Experts