COVID-19 and its implications for business and the economy has really focussed the mind on cashflow. Many businesses are now struggling with maintaining this fundamental of any successful enterprise to keep it healthy. This is proving difficult when businesses are furloughing staff, paying suppliers and paying ongoing business expenses at a time when revenues are falling or even ceasing.
Many more businesses are now looking at how they can get the finance they need to see them through. The government is helping with CIBLS and other measures but as we have seen funds are still not getting to all the businesses that need it.
Depending on what stage your business is at, start-up or growth, the kind of finance you are going to need will be different. To get finance or access CBILS your business must have been viable up to the impact of COVID-19 on your operation.
With everyone scrambling after grants and loans under CBILS it’s easy to overlook tried and trusted sources of finance. And the fundamental rules of business finance will still apply as time goes by.
Don’t ignore options, which might include business loans, peer-to-peer finance, sale and leaseback of assets, business re-mortgages and other government grants.
Check out our blog here for more on finance options.
Whatever finance option your looking at, whether it’s CBILS or any other source, there are 7 things that you should consider in order to enhance your chances of success.
- Have a business plan
- Know your credit scoring
- Be honest – how much you need and what you will use it for
- Collate all necessary documentation
- Educate yourself
- Consider your assets
- Seek advice
1. Robust business plan
Investors and lenders will want to see where your business has come from, where it is now and where you predict it going in the future. A robust business plan will include all this along with your sales and marketing strategy, cashflow reporting and solid financial forecasting.
2. Check your credit scoring
Go online and visit a credit scoring agency such as Equifax or Experian and check your credit score. This score is an estimate of the risk of lending to you based on your credit history. Knowing your score will allow you to assess the likelihood of gaining finance or whether you need to try a different funding strategy.
3. Be honest
Work out how much you are actually going to need and outline as much detail as you can what you are going to use the money for. Don’t underestimate (or overestimate) how much you’ll need.
4. Collate the documentation your lenders ask for
You should have a set of up to date accounts, cashflow projections and a business plan together and include all the relevant documentation your lenders ask for. They’ll want to see balance sheets, tax returns, a profit and loss statement, personal and business bank statements, documentation relating to your business assets among other things so make sure you have these things to hand as you complete your application for finance.
5. Educate yourself
Take time to understand the lending process and apply to the right lender. We can help you with this learning process. Call us on 0203 3270567 or visit our website for more on this.
6. Consider your assets
As you will have seen, there are a number of different finance options available to you. And with the prospect of government assistance it’s easy to overlook what’s on your doorstep – your invoice ledger and your assets.
Invoice factoring and discounting as an alternative to a commercial loan are worth exploring and you may also be able to secure finance against your existing assets. Both these methods may get you funds more quickly in the short term while you are waiting for you CBILS or other loan applications to be processed.
7. Seek advice
Make sure you get the right advice at the right time. We appreciate these are difficult and confusing times that we are living through so getting advice it more important than ever.
Please call the team today for a free consultation on 0203 327 0567 or email [email protected].
We will call you back immediately.