Rising business rates hitting your SME?Published on 15th March 2017
Expecting rising tax demands?
Running a successful SME business is by no means an easy feat. As enjoyable and rewarding as it may be to become your own boss in your chosen sector, ensuring growth and sustainability are no tasks for the meek. If projections from the Federation Of Small Businesses (FSB) are to be believed, yet another challenge is soon to arrive at your doorstep in the form of business rate hikes.
In fact, according to their research, around 36% of SMEs are bracing themselves for business tax rises that may well see them forking out over £1,000 per annum. As a result, many business owners are choosing to slam on the breaks on their business’s growth.
How can tax rises affect your business?
“The business rates system is an unfair, regressive tax” argues FSB national chairman Mike Cherry, “which hits small firms before they’ve had the chance to make their first £1 in turnover, let alone profit.”
Responding by stalling your growth is absolutely the wrong decision to make. It is a key component intrinsic to success and sustainability. Without it, your business will encounter any number of harmful issues that threaten its survival. In order to endure and prosper in even the hardest of times, your business must seek external funding.
But, even the question of funding is no picnic. Ever since the 2007 UK Banking Crisis, major high street banks have become hesitant in lending to SMEs. Yet, although this may sound like bad news, there is another option worthy of consideration. If you’re feeling apprehensive when it comes to paying your tax bill, the alternative finance industry can help.
How can you tackle your taxes?
By choosing to explore your business finance solutions with access to finance providers, such as Rangewell, you can access an extensive range of alternative finance products. When it comes to getting on top of bills, don’t wait around, your business can benefit from anything such as Business Loans and Merchant Cash Advances.
- Business Loans:
If you’re considering a business loan there are two types to be aware of: Secured and Unsecured. To apply, lenders must be able to review aspects such as your Credit History and Credit Score.
With an unsecured loan, you could acquire a lump sum of between £5,000 to £250,000, all without the need to lay down assets as security. However, if you need to get hold of a larger sum you could offer potential lenders a personal guarantee.
Meanwhile, with a secured loan you can bestow upon your business a lump sum starting from £5,000 up to as much as £1,000,000. With this type of loan, you are required to put forward assets as security. Should your business become unable to keep up with the monthly repayment scheme or fail to pay entirely, lenders can claim these assets to recoup costs.
- Merchant Cash Advance:
Before we begin, it’s important to understand that this finance product is not a loan. By opting for this method, you can acquire a lump sum based entirely upon your potential revenue for a particular upcoming month. To be eligible, your business must support Credit and Debit card transactions via methods such as ‘Chip & Pin’ and be able to supply 3 or more of your latest consecutive sales reports. Should they agree, they’ll offer to purchase one month’s potential takings, at a discount.
What makes this product truly unique is the repayment structure, which is one of the most flexible on the market. Rather than having to commit to fixed monthly payments, the lender will instead take a percentage of your monthly revenue. For the sake of argument, let’s say a lender offered you 18%. This means that they’ll be taking 18p from every £1 your card customers pay until the product is fully repaid. Therefore, if you earn less on a particular month you pay less, and if card customers spend more you pay more. It’s worth noting that any lump sum can arrive within 48 hours of applying and decision aren’t based upon your credit score or history.
Our values are simple – We’re on your side. Our services are clear and transparent. We support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.
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