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• 05 Mar

  Topping Up Invoice Finance With A Business Loan

  We have had some interesting situations recently where customers are growing so fast that their need for working capital is actually outstripping the funding released by their invoice finance facility. It is great to have such potential trading volumes, but it brings with it a struggle to ensure that your cash flow can cope with the level of funding required.

  High Growth Phase Over Trading

  When a business is going through a very high growth phase, it can be a case of the volume of trade being limited only by the amount of working capital that the company can access to pay for raw materials, staff wages and other operating costs. We have seen numerous examples of clients having to turn down potential orders as they simply cannot afford to fund them - accepting these kinds of orders is often called over-trading.

  Top-Up Funding For Invoice Finance Users

  Several of our portfolio of invoice finance clients are growing very rapidly, and in a few cases, their needs for capital are outstripping the 85% or even 90%, of invoice value, released by their invoice finance facilities. There are potential solutions in such cases.

  It may be possible to access some form of top-up business loan, in addition to an existing invoice finance facility. This can be arranged if you are an existing client of ours or even if you are not, but are already using factoring or invoice discounting from another provider. This loan can be arranged without affecting your existing funding arrangements, in order to release additional working capital for your company to use.

  Business Loans & Security

  If there are any other assets available as security, it could be a very simple situation to leverage them in order to secure additional funding. However, even without additional assets, there are other possible avenues. Some possibilities are as follows:

  • A cash flow loan to top up an invoice finance facility.
  • A business loan in addition to factoring or invoice discounting.

  Business Loans For Startups

  Our partners that deal with sourcing business loans for clients have access to a full range of providers, that can look to structure a loan based on your particular circumstances. Business loans may be available to new startup companies and even companies where the prime movers are not homeowners. 

  Declined By A Bank?

  Clients often assume that because a bank won't give them a loan - they won't get one elsewhere. That is not the case, there are many alternative lenders that may be able to help when your bank has declined you for a loan or overdraft.

  Act Before The Opportunity Disappears

  One word of caution, I hear rumours that some lenders are increasing interest rates and taking tougher stances about who they will lend to, off the back of an increase in defaults and bad debts that they have suffered. There is a fear that some lenders may start to pull out of this market space and so if you have a requirement act quickly, secure the funds you need at reasonable rates before there is any wholesale movement across the market. Act before the opportunity disappears.

  Please contact Sean on 03330 113622. 

  By Glenn Blackman