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Make your funding work for you: 6 ways to customise your business finance

Published on 21st October 2015 - Last update on 12th January 2020

Say you’ve got a client looking for business finance. But, like so many SMEs, there’s something that’s making it hard for them to get a traditional bank loan. Maybe the repayment terms don’t fit their business’ seasonal cash flow, or they can’t get approved despite good credit. Professional advisors and accountants are running into this more and more lately – but there’s something you can do about it. Business finance is more customisable than ever before, and here at Rangewell, we’ve come up with lots of interesting solutions to the tricky problems we’ve encountered.

1. Defer VAT

One of our clients couldn’t buy the new machinery they needed to take on a big contract because of a large VAT bill they had coming up. So that they wouldn’t lose out on the contract, we fixed them up with a new hire purchase agreement that deferred the VAT payments until they could afford to pay them with the money from their new business.

2. Put off a payment

Generally, it’s not a good idea to put off a loan payment for months and months. But for this business, there wasn’t really any other option – they just couldn’t make the increased payments from leasing new equipment right away. We set them up with a bank that allowed them to do just that: put off payments on the loan for four months, without a penalty. By giving them a little time to grow, loan payments were a lot easier further down the line.

3. Find a lender that fits your business

We talked about this one in more detail recently, but as a refresher: a forestry company couldn’t get mainstream funding because they were considered a specialist sector. We knew a business lender that understood forestry, we set them up, everyone’s happy. Especially because that relationship’s going to last for a long time.

4. Work with your seasonal cash flow, not against it

This is another case that we’ve told you about before. An advisor representing a bakery came to us because the business’ seasonal cash flow made it impossible to make lease payments regularly. We managed to engineer a new agreement, where their slowest months – June, July, and August – had lower payments, so they could keep up with their loan all year round.

5. Divide and conquer

A quickly-expanding business needed to buy £300k worth of machinery, but because they were a relatively new business, they couldn’t find funding for a loan that big. So we split things up and found three separate lenders for three £100k loans. Now they’ve got the cash they need and three new funding partners who’ll expand on their investment.

6. Stick with people you trust

Loyalty pays off. One client we worked with had stayed with their current bank ever since they started their business years ago, back when SMEs found business finance a lot easier to access. Now, when they had a little more trouble getting the funding they needed, we went straight to their current bank, who, based on their long relationship, immediately agreed to mix and match some loan features – customised repayment plans, deferred VAT – to suit the business’ new needs.

A lot of these clients didn’t even know they had options outside of traditional bank loans. But business finance is a lot more customisable than you think it is, and there’s a way to work around just about any special criteria. Through the Rangewell platform, you can find business finance that suits your client’s individual needs.

If you want to be part of a story like these, click here to get in contact with our finance team.

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Sarah Thornton

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