Cash Flow Lending: What is it and how does it work?Published on 21st June 2019 2019-06-21T11:00:00+00:00 - Last update on 20th March 2020 2020-03-20T10:41:51+00:00
Healthy cash flow has always been a powerful engine behind any UK business, providing a stable foundation for growth and reliable day-to-day operations. Yet despite its necessity, cash flow is one of the trickiest aspects of running your own business. Naturally, you do everything you can to secure new customers and ensure they spend their money with you but, sometimes and though no fault of your own, you may run into a number of issues involving your cash flow that threatens the stability of your finances. Although it can be intimidating, you must remember that quick and decisive action is what makes all the difference. That’s why many business owners choose Cashflow Finance to support their business. Providing access to a variety of finance solutions, Cashflow Finance could provide the funds necessary for supporting day-to-day operations and tackling the root cause of the issue.
What is Cashflow Lending?
Cashflow Lending is a tool that many business owners use to support their operations and resolve any underlying issues before any lasting damage is done. This is achieved by generating funds on the back of your previous income, card-based sales, unpaid business-to-business invoices or the equity contained within your unencumbered assets (equipment, machinery or vehicles). In order to do so, Cashflow Lending offers you access to a variety of financial solutions including Merchant Cash Advance (MCA), Invoice Finance, Overdraft Replacement and Asset Refinance. So no matter what’s affecting your business or how much support you require, the tools you need to reinforce your cash flow are at your disposal.
Is your business suffering from the effects of uneven cash flow? Need help providing the support your business needs to move forward? Apply for Cashflow Finance and learn more about how your business could benefit.
When should I consider Cashflow Lending?
When it comes to supporting your cash flow, it’s all too easy to feel lost and confused by the situation that’s unfolding. However, no matter whether the issue involves late payments, unexpected bills, revenue shortfalls, vandalism or natural disasters, your focus needs to be firmly set on getting your business moving again. That’s why, whether you’re currently experiencing cash flow issues or are expecting do so in the near future, you could benefit from exploring what Cashflow Lending has to offer. Plus, depending on your chosen product, you could receive an agreement in as little as 48 hours with the funds following soon after.
What do I need to apply for Cashflow Lending?
If your business stands to benefit from Cashflow Lending, some of the factors you need to consider when placing an application include Security, Credit Worthiness and Documentation.
The act of providing security, for example with Asset Refinance, usually involves presenting collateral in the form of unencumbered assets such as equipment, machinery or vehicles. Although this helps to raise lender confidence and could earn your more favourable interest rate, it does, in fact, mean putting your assets at risk of repossession should you fall behind in the repayment scheme.
Even though it is also considered as a secured finance solution, Invoice Finance products use the capital contained within your unpaid business-to-business (B2B) invoices. So unless you’ve taken out bad debt protection, your business may be required to settle the invoice if the debtor fails to repay what they owe.
Yet, on the other hand, Merchant Cash Advance is an unsecured form of lending that doesn’t require the use of collateral. This is because Merchant Cash Advances use a Flexible Monthly Repayment scheme that allows lenders to automatically intercept an agreed percentage from each of your card-based (credit and debit card) transactions until the debt has been repaid.
As always, lenders seek to minimise the amount of risk that they’re accepting. But what makes Cashflow Lending so useful is that it’s open to a wide range of financial situations. One way in which lenders decide this is by reviewing your credit profile. However, the amount of attention that’s given to credit profile varies depending on your choice of product. So, although lenders will request permission to view your credit profile when applying for products such as Asset Refinance or Overdraft Replacement, they often take a different approach when considering an application for a Merchant Cash Advance. Here, lenders prefer to take into account the strength of your card-based sales. Therefore, no matter where you stand financially, you could still receive the support you need to persevere and move forward.
When applying for Cashflow Lending, the documents that you’ll need to provide along with your application can vary according to your chosen product. That said, this should be outlined within the documents provided to you by the lender. Nevertheless, the documents that you’ll need to submit often tends to include proof of identity, recent and past bank statements, profit and loss statements, sales reports, cashflow forecast, turnover, collateral documentation and tax returns. So in order to ensure that the application process runs smoothly, you should aim to get these ready and in the correct format prior to placing an application.
Need help supporting your business’ cashflow?
Although cashflow is a vital aspect of any business trading in the UK, there are a number of issues you may run into that could make it difficult to maintain. But if you do happen to enter a period of uneven cashflow, you can’t afford to just sit by and watch. That’s why more and more business owners are choosing to take back control of their finances sooner rather than later with the help of Cashflow Lending. The only obstacle standing in your way now is knowing how to source an appropriate agreement for your business.
At Rangewell, we’re an Access to Finance specialist who have mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. So if your business is suffering from the effects of uneven cashflow, apply for Cashflow Finance today or find out more with Rangewell. We're here whatever your funding need - from equipment and IT finance to premises or emergency funding.
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