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How prepared is your business for an emergency?

Published on 6th July 2018 - Last update on 8th January 2019

Ever thought about what would happen if your business was to run into an emergency? Although being your own boss can be very rewarding and exciting, it’s also a journey that can catch you off guard when you least suspect it. To put you in good stead, you need to learn how to react and take action before any lasting damage is done. But if you’re a small business owner with limited cash reserves, acquiring the means to resolve any potential issues can be particularly stressful and difficult to achieve. Fortunately, there are many lenders and finance solutions out there that could help and are designed specifically to offer your business the funds it needs quickly and efficiently. So whether it’s replacing ageing equipment, managing uneven revenue or coping with flash flooding, how prepared is your business for an emergency?

Late payments

No matter which sector you operate in, late payments can be problematic. The strain that they place on your finances could affect your ability to accept new contracts, support staff wages, pay energy bills or complete existing projects. Unchallenged, this could eventually lead to a loss of potential earnings, dissatisfied customers, diminishing supplies and declining sales. However, during such situations, applying for a short-term agreement such as Invoice Finance could be the answer. If your business trades using business to business (B2B) invoices, you could release up to 90% of the cash tied up in any invoice worth in excess of £5,000. Plus, the funds that you could receive can be used for a wide range of purposes, including trading overseas.

Is your business suffering from an unexpected emergency? Need help getting your business back on its feet? Apply for Business Finance or learn more about how your business could benefit.

Repairing and replacing equipment

In order to offer a dynamic and versatile mix of quality services, making sure that your business has all the equipment it needs is essential. It’s an area that you can’t afford to hold back on. However, over time you may need to repair, replace or expand the amount of equipment your business has access to. But no matter where your business stands in its development, the strain that this outlay can put on your finances can be too much to handle alone. Luckily, you don’t have to. Two of the most popular means of acquiring equipment for your business are Leasing and Hire Purchase.

  • Leasing: allows you to borrow equipment from a supplier over an agreed term, during which you’ll be required to make fixed monthly rental payments, plus interest. Such agreements can usually extend up to 5 years, but could be increased 7 years for particularly valuable equipment. Once the agreement matures, you can either return the equipment, extend the agreement or upgrade to another model.
  • Hire Purchase: offers your business the means to eventually gain ownership of the piece of equipment concerned, providing you keep up with the fixed monthly repayment scheme, plus interest. After the lender purchases the equipment on your behalf, you must pay an initial deposit. Subject to negotiation, this usually comprises of 100% of the VAT on the equipment plus an agreed percentage of its total asking price. As soon as this has been paid you can begin making full use of the equipment. Once the agreement matures, with all relevant payments settled, ownership is transferred to you.

Seasonal revenue shortfalls

For many UK businesses, keeping a lid on seasonal cashflow shortfalls isn’t easy. Although it’s possible to predict when you may experience a shortfall, depending on your sector, this doesn’t remove the strain it can put your business under. But rather than allowing your business to fall behind in its financial obligations, applying for short-term finance could be the solution.

A popular way in which many business owners tackle this issue is with the aid of an Overdraft Replacement facility (also referred to as a Revolving Credit Facility). Offering your business a line of credit, Overdraft Replacement works very much like a credit card in that you gain access to a predetermined allowance based on your business’ past earnings. Although you’re not obliged to draw down any of the funds that are made available to your business, anything that you do withdraw will be charged interest, and need to be fully repaid within 30 - 90 days (depending on the agreement). But, should you withdraw more than what you’re allowed, your business will be charged an overdraft penalty. Once the funds that you’d previously drawn have been repaid, you can go on to withdraw them again on a revolving cycle.

Premises damage

Whether you own or rent your premises, making sure that you’re able to welcome customers and employees into your business is essential. However, you may on occasion run into issues that could affect your ability to do so. As well as conducting urgent refurbishment work, your premises could fall victim to vandalism or even a natural disaster. Yet, whatever the reason may be, getting your business back on its feet and trading again is vital.

Depending on the situation, you may decide to make a claim with your insurer, but it can take up to 90 days for funds to be released. However, if you can’t afford to wait that long, you could receive an advance in as little 48 hours by applying for a Merchant Cash Advance. A Merchant Cash Advance provides your business with an advance based on your predicted card sales, and carries no usage restrictions. This particular funding option also features flexible monthly repayments that deduct an agreed percentage from each of your subsequent credit and debit cards sales until the agreement is repaid, leaving any cash payments intact.

Is your business prepared for an unexpected emergency?

Although it’s difficult to predict what challenges your business may encounter in the future, making that sure that you have a plan in place to resolve them as and when they arise is a necessity you can’t ignore. But for many UK business owners who seek to pursue their goals in confidence, the support they require to overcome any eventuality comes from applying for business finance. All you need to do is source a finance solution that’s appropriate for your business’ objectives.

At Rangewell, we’re an Access to Finance specialist working with over 300 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 through the application process. We’re with you every step of the way. So if you’re looking to support your business during an emergency situation, apply for a Business Finance solution today or find out more with Rangewell.

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David Harrison

David Harrison

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