Business Finance - The Year Ahead

2024 is underway. It looks like it could be a relatively good year for businesses in the UK. Inflation is falling, interest rates are likely to fall, supply chain disruption seems to be over and business confidence is growing. The government will be throwing what good news they can at the electorate ahead of a general election.

There are reasons to be positive.

What does this mean in terms of business finance?

Let's take a look at different products and look at what you might consider.

Invoice Finance

Discounting fees will decrease if the base rate falls. Remember the base rate has increased from 0.10% to 5.25%. This has caused a huge increase in borrowing costs.

Service fees can differ dramatically between different providers. It is also important to look beyond headline rates. Look at any potential additional charges. Remember, some lenders don't charge any additional fees at all.

Many businesses will see growth in sales. Remember that as turnover increases the percentage service fee you pay should reduce.

The review is your friend. Review any existing facility regularly. You might be surprised by just how much can be saved.

Asset Finance

The potential reduction in base rates will have the biggest impact this year. It may be worth looking at variable rate deals where possible.

Asset valuations will hopefully hold up as the economy hopefully improves.

There is plenty of appetite to help fund new purchases.

There is also appetite to refinance assets businesses already own to free up cash.

Trade Finance

If you get that dream customer order but need to pay a supplier upfront it can quickly turn into a cash flow nightmare.

Trade finance or purchase finance can be the perfect solution.

If structured properly this type of funding could allow suppliers to be paid when they dispatch the goods and the funding can be repaid when your customer pays.

Business Loans

The unsecured loan market is significantly reduced compared to where it was years ago. There are less providers and loans are less readily available. The more readily available loans are short terms and high interest.

Secured loans may be more appropriate.

Remember, unsecured loans were never totally unsecured. They may not have been charged to specific assets but they were covered entirely by personal guarantees.

Secured business loans are secured against a particular asset which is typically property.

Terms of up to 10 years are available.

Funding Solutions - Here to Help

This will be our 18th year. We have been helping and supporting businesses through the good times and the bad.

We look forward to helping businesses in the year ahead.