Focus on Business Advice
The changing face of business finance
Business finance can appear daunting initially, but a post-recession surge of new alternative finance providers means businesses now have more choice than ever before. Rob Greenhalgh, relationship manager at PMD Business Finance, reports.
T
he changing face of finance also means that businesses donʼt have to be reliant on the banks, as they may have been previously.
I have many years of experience helping clients in the printing industry to access alternative finance for growth and expansion.
I believe that dealing with this wave of new funders has invigorated businesses
that no longer feel bound to their bank. SME owners certainly donʼt have to put all their funding requirements in one bank basket. They can now access a wide range of independent lines of finance, meaning they are the ones who can determine the pace of their expansion – not their bank.
When a business is looking for funding, there are a number of different options to
explore. These include: ● Asset finance – funding for equipment, machinery, commercial vehicles and fit-
outs. ● Business loans – these can be for any business use, including refurbishing premises, funding new orders, business expansion, stock purchases and property
deposit. ● Invoice finance – helps to grow your business by unlocking funds tied up in
outstanding invoices. ● Refinance – raising money against
existing assets. ● VAT funding – this helps you bridge the
VAT payment gap. ● Commercial mortgages – mortgages for any business premises and re-mortgages to release funds. Alternative finance products are equally as wide-ranging as any bankʼs portfolio of options, and are arguably much more
| 66 | October 2019 flexible.
The key difference is that there is less security required and that each facility can be independent, which guards against over-exposure. With such a choice of funding options, SMEs now have the power to expand their businesses at their own pace. Letʼs look at these different finance options in more detail.
Asset finance
Asset finance is available for all types of equipment, machinery and commercial vehicles. Regularly financed equipment in this sector includes automated textile presses, direct to garment printers and textile conveyer dryers. However, most business assets can be funded. The two man asset finance products are
ʻhire purchaseʼ and ʻfinance leaseʼ. Both products allow businesses to finance business assets over periods normally ranging between three to seven years. Typically, three and five year terms are preferred. This allows businesses to acquire assets now and pay for them over their ʻusefulʼ life.
Hire purchase has distinct advantages at present, with 100% Annual Investment Allowances available for another 18 months. This means that any business
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