Finding the best routes to finance
The Lombard Accountants team know that every business needs finance to get the initial enterprise off the ground. You may well have entered into finance arrangements to fund the initial stages of the business, taking out loans to purchase equipment, lease premises or take on staff.
Other finance options may be available to help you fund your continuing growth, so taking a look at the current finance market is well worth thinking about. Here are some tips from the Lombard Accountants team:
Refinance your existing loans
It’s possible that you already have business loans in place, that’s you’re gradually repaying over the course of the loan period. Sourcing that initial capital is such an important part of the startup process, and a vital stepping stone in getting your business idea operational. But when was the last time you reviewed these finance arrangements? Could you, in fact, be getting a better deal?
The finance market is always evolving. New challengers will enter the market, new specialist finance products will be introduced and interest rates and repayment schedules will fluctuate and change. You may well have got a great deal on the business loans you took out five years ago – but refinancing these existing loans is likely to have multiple benefits.
- Consolidate your existing loans into one finance facility
- Lower the interest rate you’re currently paying on the loan
- Pay off your loan more quickly, to reduce the debt in the business
- Improve your cash flow position by cutting your repayment expenses
Look for alternative routes to finance
Traditionally, businesses went to their bank manager when additional funds were needed. But the dynamic in the funding market has changed dramatically in recent years. Due to economic pressures, and the impact of the pandemic, the big banks have scaled back their lending to small businesses. Your high street bank is no longer the first port of call when finance is needed.
On the flip side of this, there are a growing number of alternative lenders, smaller challenger banks and specialist finance providers to choose from. And this has created a wide choice of different finance products to fit the needs of your growth plan.
- If you need new equipment, asset finance is available.
- When you have a short-term cash flow crisis, invoice finance is a good option.
- If larger premises are needed, there are commercial mortgages to consider or bridging loans to make the initial purchase while you source the full capital that’s needed.
Check out the available government funding and grants
During the pandemic, many businesses made use of the emergency funding that the government made available. But don’t forget that government funding isn’t just something that’s available during an emergency.
The state will generally offer all kinds of different enterprise schemes to encourage investment in new and growing companies. This could mean having access to funding schemes, government-secured loans or even government grants. Unlike a loan, grants generally don’t need to be repaid, so making use of local government grants is a great way to boost your capital without having a negative impact on the company’s debt position.
For the latest business/practice news, taxation/financial resources and our Newsletter, visit https://la.ie/