An alternative to small business loans

An alternative to small business loans

Small businesses can often find that cash can hold back their growth. Small businesses may want to invest in new machinery, premises, talent, or develop a new product and service; however they may find that they just don’t have the cash available to turn these plans into reality.

If this is the case then a small business loan can help solve your problems.

Most businesses need to borrow money in order to grow, and sometimes businesses need to borrow money to resolve short term cash flow issues causes by the gap between paying suppliers and being paid by customers. Without an immediate injection of working capital some small businesses may go under.

The alternatives

Instead of borrowing money through a small business loan, you can borrow money through invoice finance.

Invoice finance is a flexible solution to your business finance needs. Invoice discounting or invoice factoring releases the cash tied up in your sales ledger to give you an immediate cash boost.

Invoice factoring is a modern asset based lending solution that has been gaining popularity recently, and the reasons for this are as follows:

  • It is suitable for almost any business that offers credit terms to other businesses
  • It can be quickly arranged
  • It is a flexible borrowing option
  • It is controllable
  • You don’t need to use your assets as security
  • The amount you borrow is only limited by the amount you invoice
  • You save money and time as the factoring company takes care of your credit control

Some good uses of business finance

Obviously the extra cash you get through business finance can be used for whatever you choose; however here are some great ways that small businesses invest the extra cash to really benefit their businesses:

  • To find new premises, in order to produce more products or services and get more sales
  • To buy new equipment, so you can increase the services or products you have available or to increase production
  • To fund a sales and marketing drive, so that you can make more sales
  • To invest in new talent or skills, so that you can develop your business, increase production and make more sales
  • To improve efficiency by replacing a telephone or IT system.

Whatever your reason for taking out the loan, the purpose is to generate new business and increases profits. Do your research before committing to a loan so that the finance product you decide on is flexible enough to support your growth instead of holding you back.

For further advice regarding business loans please contact us on 0800 597 4757 or apply online using the form opposite.