Genie Lending’s blog provides helpful information and advice about business loans and alternative finance methods. Learn more today.

How to Use Invoice Financing

Any business owner will be familiar with the situation – the end of the month is approaching, employee salaries and property fees require payment, but you haven’t yet received the funds from a number of outstanding invoices. While a 30-60 day turnaround on invoice is supposed to be standard, statistics show that the average invoice under £1 million takes 71 days to process.

Are you a business looking for a method to increase cash flow and speed up access to money owed to you? Then invoice financing may be an option for you and your business. Invoice financing is where a business borrows money based on the amount due from the unpaid invoices from their customers. By doing this, cash can be accessed straight away rather than waiting for the invoice to be paid by the client. This quicker access to monies owed may allow you to grow your business quicker and alleviate any cash flow issues.

There are different forms of invoice financing known as invoice factoring whereby a third party company collects your outstanding invoices, or invoicing discounting where you collect the invoices yourself. This article will look at the ways invoice financing in general can be used to support your business.

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A Guide to Commercial Alternative Finance

Born in the United States of America, the alternative finance revolution has landed on our shores in the last couple of years and raising finance for the SME will never quite be the same again.  It is forecast that by the end of 2015, the altfi market place will have issued new loans of well in excess of £4 billion.

Gone are the days of going cap in hand to the business banker clutching armfuls of finger in the air financial projections produced, at cost, by your accountant.  Gone also are the days of waiting interminable amounts of time jumping through endless banking hoops whilst our “local” banker presents funding cases to far flung decision makers.  Gone are the days of being forced to proffer more and more personal security to support the funding requests of a growing company.

With the SME denied the help of traditional banks, largely due to the outcome of the 2008 crash and the impact of the Basle Accords on bank liquidity ratios, but with demand for vital sources of working capital still there, the number of alternative finance providers ready to plug funding gaps has grown apace.

Businesses come in all shapes, sizes and hues and, as a consequence, every business has its own unique funding requirements.  Alternative finance providers have emerged to focus on specific segments within the SME funding mix.  This is great news for the SME exploring its funding options, but the myriad of potential solutions does create its own challenges and the plethora of new players delivering multiple options can make it somewhat overwhelming for the uninitiated to tread a well planned path through the maze of new finance providers.

In an unstable economic climate banks are less likely to lend – especially to risky business investments. In today’s unpredictable financial market, it is becoming more and more difficult to get approved for a bank loan, which is why the trend for alternative finance solutions keeps on growing. Without these alternative funding options, many businesses would have ceased trading or would-be successful property investors wouldn’t have been able to buy a second property. Read more

I’ve Been Rejected for a Commercial Loan… What Next?

Being rejected for a commercial loan from a bank can be a demoralising experience, but it’s one you shouldn’t take personally or allow to dampen your enthusiasm. After all, any successful business owner is going to need a pretty thick skin, especially when it comes to matters of finance.

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Which Industries Use Business Loans?

If you’re considering applying for a commercial loan to help your business reach the next step in its development, you might be interested to learn whether other enterprises in your sector are borrowing money. Which industries use business loans more than others?

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Business Loan Success Stories

Have you struggled to secure funding for your start-up or small business? Whether you’ve been rejected because of a poor personal credit rating, lack of experience or unfavourable accounts, it can be tempting to take the knock-back personally and assume you’ll never receive funding.

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How a Bridging Loan can Help your Finances

A bridging loan, sometimes known as bridging finance, is a viable short term lending option for many businesses. It’s called a bridging loan for a reason – it acts as a financial bridge, helping you along to your next destination. It gets you from A to B, until you have money coming in to clear the loan.

Many companies opt for a commercial bridging loan because they can be arranged in a very short amount of time compared to other types of finance. They are also available up to very large amounts – up to £20 million from private and flexible lenders. Short term bridging loans are available to individuals or businesses, but are generally used for the same purpose. Read more

What Criteria Do Lenders Look for in a Business?

Are you a fledgling entrepreneur looking to launch your own business? Or perhaps you’ve already taken the plunge and now wish to expand your operations? Either way, it’s highly likely you’ll need an injection of cash to make that vital next step and loaning from a bank, building society or other money lender is the traditional route.

Whoever you turn to for a business loan is not going to look favourably on an investment that they can’t see a return on, so it’s your job to convince them that you have what it takes to succeed.

Criteria Lenders Look For in Your Business

In particular, here are a few criteria that lenders will be on the lookout for:

  • Have you drawn up a comprehensive business plan, complete with a summary of your operations and your projected earnings and outgoings for the next two to three years? Preparation is key.
  • Market awareness. Similarly, you’ll want to include a rundown of the size, demographic and growth opportunities of your target market, as well as the state of play regarding your competition. What sets your business apart? Sell yourself.
  • Remember to make clear what you need the loan for and how it will affect your business. Whether you want to take on more staff, move to a bigger office location or expand your customer portfolio overseas, it’s imperative to stress the value in this transaction – for both of you.
  • Credit rating. All the business acumen in the world won’t win a loan if you have a poor credit history – after all, the shiniest colander leaks just as much water as the shoddiest one. Sort out your finances before you lay out your aspirations before a lender.
  • Cash flow. Again, you’ll need to show that you’ve not only managed your debt repayments in the past, but that you’re well equipped to do so again. Accurate data on your revenue and outgoings (both current and projected) is vital to breeding confidence in your business.
  • If you already have substantial assets belonging to your business, a bank will be more inclined to look favourably on lending you money than otherwise. This can act as a guarantee that they can recoup their outlay in the worst-case scenario.

Tick all the boxes on this checklist and you stand an excellent chance of being approved for credit from any lender you approach. However, the economic slump of the last decade has meant that more and more people are turning to alternative finance solutions to obtain the funds they need to help their business realise its full potential.

With that in mind, just remember that there are plenty of other options out there if the traditional route doesn’t bear fruit. Asset finance, peer to peer and crowdfunding are all increasingly popular methods of alternative finance that may well be right for you… and the criteria listed above will be just as beneficial on those fronts, as well.

How to Start a Business in 2018

New Year, new you, new business venture? Go for it! There’s never been a better time to follow your dreams and kickstart a successful business than today, as the sooner you get the ball rolling, the sooner you’ll be able to reap the rewards. Read more

How to Make Sure your Finance Application Isn’t Rejected

Applying for a business loan can be disheartening, with more and more companies being rejected by mainstream lenders. High street banks have a very strict set of criteria, and no matter how hard they try, the majority of businesses can’t jump through the endless hoops. Unfortunately, many business owners find themselves in the position of having a loan application rejected. Read more

What can Asset Finance be Used for?

Many businesses from a whole host of industries rely on asset finance to spread the cost of expensive goods and grow the business. Not many companies, especially smaller firms, have large amounts of cash to buy essential equipment or machinery upfront – so asset finance allows them to purchase items on a lease basis. Asset finance can prove invaluable to sectors which rely on specialist equipment such as farming, construction and manufacturing.

Asset finance can be a suitable solution for companies who have been refused a bank loan. The only difference between a traditional loan and asset finance, is you have to set out how you will use the money and what will be purchased. What you buy is referred to as an asset. Anything of value which a company requires to conduct business can be classed as an asset. Read more