Flexible business loan boost your working capital

Loans to boost your working capital

The different loan options for businesses include:

• An agreed business overdraft
• A fixed rate loan- where the interest rate stays the same over the loan period
• A variable loan- where the rate of interest changes with the base rate
• A capped loan- where the interest rate stays the same for a set period
• Asset finance
• A commercial mortgage
• Invoice Finance- Discounting or Factoring

Invoice Factoring

Invoice factoring is an alternative finance option and it is gaining popularity. Unlike a loan, factoring doesn’t provide you with a lump sum that you have to pay off over time, but instead it can release up to 95% of the cash tied up in your unpaid invoices, often within 24 hours of you raising the invoice.

Factoring means that when you raise an invoice you no longer have to wait between 30-90 days for your customers to pay you.

Factoring improves your cash flow and allows you to concentrate on growing your business.

The benefits of factoring are:

• Its flexible
• Its controllable
• Its not a loan, you have already earned the money
• The available working capital grows with your business
• You don’t need to offer up assets as security
• You save time on credit control

Invoice Discounting

Invoice discounting is similar to factoring, in the way that it releases cash tied up in unpaid invoices, often within 24 hours of raising the invoice. However it differs in collecting the payment, as with Invoice Discounting you collect the payments yourself.

The benefits also include improved cash flow, plus the ability to get greater amounts of finance, as the more you invoice the more you can borrow.

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