Going forward with Growth Finance
Regardless of your sector or how large your business may be, maintaining a reliable rate of growth is vital for ensuring your long-term success. Yet although you may have set down clear objects and a detailed strategy, turning your goals into reality also requires access to capital. However, for many SMEs this can prove a major stumbling block. But, if you’ve got the temperament and tenacity to push your business forward, there is one pathway you may wish to explore. Growth Finance is a unique funding package that offers you the means to pursue each of your key growth objectives. But in order to make the most of the solutions that are available to your business, here’s a useful guide on Growth Finance.
Acquiring vital equipment
Every day that your business operates, you will, no doubt, be relying on a wide range of equipment, machinery and vehicles to keep everything running smoothly. But over time, you may need to expand, upgrade or replace ageing equipment. Naturally, this can easily present a challenge, even for well-established firms. However, there are 3 finance solutions that could help: Hire Purchase, Leasing and Asset Refinance.
- Hire Purchase: allows you to eventually gain ownership of a piece of equipment and terms can last up to 5 years, during which time you’re required to make fixed monthly repayments, plus interest. But, before commencement, you must pay an initial deposit consisting of the equipment’s full VAT and an agreed percentage of its purchase price (subject to negotiation).
- Leasing: involves borrowing equipment over an agreed term which typically lasts up to 5 years, but could be extended to 7 years, during which, you’re required to make fixed monthly rental payments, plus interest. Once the agreement matures you can choose to either return the equipment, extend the lease or upgrade to another model.
- Asset Refinance: enables you to release up to 100% of the equity contained within one or more of your business’ unencumbered assets in order to generate a lump sum. This type of asset-based lending is also repaid using a fixed monthly repayment scheme over an agreed term lasting up to 5 years and once repayments are completed, the ownership of the asset in question is returned to you.
Opening another branch
If you’ve managed to successfully lay solid foundations for your business at your current location, you may want to explore opportunities in other markets. To do so, opening a new branch may prove advantageous. However, as well as acquiring the necessary equipment, purchasing commercial property in the UK is often very expensive. But if you’re adamant about setting up office in a prime location, there 2 options available: Commercial Mortgages and Bridging Loans.
Commercial Mortgages: are secured, long-term solutions that can last up to 20 years, during which you’ll need to make fixed monthly repayments, plus interest. Subject to negotiation, you’ll also need place a portion of your own capital in the agreement, equal to an agreed percentage of the property’s asking price.
Bridging Loans: are short-term finance solutions that typically last up to 12 months. You can choose to apply for a Closed or Open Bridge product and interest repayments are usually made in one of three ways: monthly interest payments, rolled-up-interest or retained interest.
Hiring and training staff
At the heart of any business lies a great team. But for many SMEs, hiring and attracting new skills can prove challenging. Yet unless you have qualified people in your business, possessing all the latest equipment and IT systems in your sector won’t mean a thing. So in order to support the cost of hiring and providing access to training, you may wish to consider applying for Invoice Finance.
Invoice Finance: is a secured form of lending that enables you to release up to 90% of the funds tied up in any business-to-business (B2B) invoice worth in excess of £5,000. The most common types are Invoice Factoring and Discounting, with both requiring the debtor to fully repay the invoice within 120 days. Once the invoice has been repaid, the debtor will release the remaining balance to your business, minus any costs and fees.
Accepting new contracts
Finally, If you’re looking to take on any lucrative contracts from another business which will enable you to grow and expand, you first need to convince them that your business can be relied upon.
In many cases, whether your bid is accepted or rejected can be a make or break situation for your business. As such, you need to ensure that your business is fully prepared, which may include replenishing supplies, replacing ageing equipment and getting your finances in order. So, as well as Invoice Finance, you could overcome this obstacle by applying for an Overdraft Replacement facility.
Overdraft Replacements: these are short-term agreements that can be either secured or unsecured. They work by offering your business a line-of-credit, granting you access to an allowance based upon your business’ past income. Although you’re not required to make use of any of the funds that are made available, anything that you do withdraw will be charged interest and needs to be fully repaid within 30-90 days (depending on the agreement). Once repaid, you’ll regain access to the allowance, which can be withdrawn and repaid on a revolving cycle.
Need help supporting your business’ growth?
Although growth is one of the most exciting aspects of running your own business, raising the funds you need to move your goals forward can be frustrating. With so many different products on offer, sourcing the most appropriate can leave you feeling lost and confusing. Yet no matter what your plans involve, applying for Growth Finance could be the answer. You just need to know where to look.
At Rangewell, we’re an Access to Finance specialist working with over 350 lenders to offer you an overview of more than 23,000 business finance products. We work closely with businesses to understand their specific challenges and support and guide them through the application process. Our services are also free to use. So if you’re looking to stay ahead of your competitors, apply for Growth Finance today or find out more with Rangewell.