Q&A Q Q Q
A The funder will consider time trading, current performance and affordability alongside how the equipment will generate income for them so will want to understand and be given evidence that your business can demonstrate a return on investment (ROI).
What aspects of a garment decorator’s business is taken into consideration during the lending process?
Can a new start business access finance?
A Yes. We have access to over 100 funders, many of whom are willing to support new start businesses. The criteria is a little stricter but as long as there is sufficient fall back in the people behind the business and they evidence a clear business case then the process is relatively straight forward.
A Financing, as opposed to outright purchase, allows your business to use the equipment to make a profit as it works for you. You wouldn’t pay your employee five years in advance, so why do the same with your equipment? This
What advantages does financing machinery and equipment have over paying for such items using cash?
also allows accurate budgeting and forecasts to stay in complete control with their fixed monthly payments.
Q Q Q
A We always recommend that businesses speak to their accountant before going ahead with any finance agreement. With the team that we have at PMD, we aim to make the process simple, transparent and hassle free.
Are there any downsides that people should take into consideration before buying machinery and equipment on finance?
A It all depends on the business, but finance can help you invest with low initial outlay to provide a new service, speed up an existing one or buy another business to complement your existing one.
Would you say accessing finance is a good way to grow and expand business?
A Communication is key. Always speak to your lender and they will work with you to structure a repayment plan and support you in navigating through a difficult time.
What should a garment decorator do if they are struggling to meet their repayments?
Q Q
A Yes, with the government providing funding and grants to keep businesses going we are seeing that this has prompted many companies to keep their hard-earned cash in the bank should the worst happen again. A lot of my customers have seen a big increase in online orders due to people working from home and so they invested heavily in faster machines to cope with demand.
Have you seen an increase in machinery and equipment being purchased using finance during the coronavirus pandemic?
A We see finance as being a main driving force, not only in this sector but for all sectors. Suppliers need to make it easier for their customers to find a funding solution. Businesses find it easier to justify their investment when they evidence ROI.
What do you predict the world of finance will look like in 2021? Will more businesses look to finance as a way of recovery in a post-coronavirus pandemic world?
Coronavirus Business Interruption Loan Scheme (CBILS)
CBILS provides financial support to smaller businesses (SMEs) across the UK that are losing
revenue, and seeing their cash flow disrupted, as a result of the COVID-19 outbreak. The
scheme is a part of a wider package of government support for UK businesses and employees.
Established business In the eyes of most lenders an established company is one that has filed more than two sets of yearly
www.printwearandpromotion.co.uk
accounts, and that has established accounting and control systems. They may have passed through a period of rapid growth and are now consolidating their position.
Finance lease
Finance lease is a popular agreement for businesses needing equipment, cars, vans and commercial vehicles. It offers flexibility to eligible
companies who want to invest in the latest technology
without having to find a deposit. Throughout the agreement, the vehicle remains the property of the leasing company.
Hire purchase (HP)
HP is available to companies who wish to invest in assets and have this show on their books from the start, with payments spread over a period of time. A full VAT deposit will be paid, part exchange offered, or both, and the higher the initial deposit given, the lower the monthly payments will be. At the end of the agreement, you will legally own the asset after paying an ‘option to purchase’ fee. With this finance offering there is also an option to defer the VAT for up to three months, which can help ease cash flow restraints.
New start business
Funders classify a new start business as anyone who has been trading for under two to three years and those who do not have a record of at least two sets of yearly accounts.
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