The life of a Small and Medium-sized enterprise (SMEs) can be a difficult one. Until you really establish yourself, it can be a constant battle with your finances but you don’t have to do everything on your own and there are ways to help alleviate the cash flow issues so many SMEs face. Many will have provided much of the capital to get things off the ground and not necessarily relied on bank loans and while this may have served you well in getting established, in order to take your business to the next level, it’s time to look at the professional finance tools that are designed specifically to aid SMEs.
Growth is essential for any SME. If you stand still things can stagnate and your competitors can move past you in the market so a business may have to diversify by entering new markets. Finance is key to this growth and there are a number of finance solutions ideal to take your business on to the next level.
Invoice finance
Aldermore invoice finance, for example is ideal to unlock your capital and grow your business. As a small business, it’s likely that you’ll need a constant flow of working capital but often this isn’t accessible as it’s tied up in your outstanding invoices. Furthermore, waiting for and chasing clients to pay cannot only be frustrating but incredibly time consuming.
An invoice finance solution, such as factoring or invoice discounting, releases a percentage of this money immediately, with the rest provided once the invoice is paid in full (less an admin fee). You’re free to use the capital to grow and expand your enterprise, safe in the knowledge that whatever funds you’re using is capital the business already has. When opting for factoring, the responsibility of chasing the payments and the credit control will be the responsibility of the factoring agent; whereas invoice discounting keeps the service confidential from your customers and leaves the chasing of the invoices up to you and the control of your sales ledger is in your hands.
Asset finance
As your business grows, so does your requirement for assets. Whether its vehicles, equipment or machinery, paying out for these assets can be costly and a drain on your much needed capital. Asset finance is a flexible way to pay for the cost of an asset during its economic life and can be broken down into hire purchase and lease finance.
Hire purchase involves paying for a deposit on the item which is then paid for in regular instalments, while lease finance involves an intermediary (such as Aldermore Bank) purchasing the asset and then leasing it to your business with no commitment to purchasing.
Both these distinct financial options offer a viable way for your business to grow and expand without leaving you in financial difficulties and is becoming integral to the life of small businesses.
