It’s that time of the year again. Whether the festive season fills you with a sense of joy or a sense of dread it can often be a difficult time for SMEs. Whilst B2C companies are hopefully booming, many B2B businesses can often struggle. Working capital is often cited as a major problem and this is where business loans or cashflow products can prove of great value in the short term and reduce stress for the business owners.
Working Capital & Business Loans
According to Bplans.com there are 6 prime reasons why SMEs fail in the short term, namely:
- Leadership Failure.Lacking Uniqueness and Value.
- Not in Touch with Customer Needs.
- Unprofitable Business Model.
- Poor Financial Management and lack of working capital
- Rapid Growth and Over-expansion
It is the fifth point on this list I’d like to discuss in this article, specifically the lack of working capital. NB this also relates to overtrading.
Whatever the reasons for the lack of funds within the business (poor financial management, overtrading or otherwise), December seems to exacerbate them. Employees and clients tend to take holidays, marketing and sales teams lose enthusiasm, your clients may be putting off using your goods and services until the New Year…the list goes on. Here at SME funding, we would always recommend that SMEs utilise suitable professionals (bookkeepers, accountants, tax advisors) if the business owner is not financially savvy – but business loans or other cashflow products to alleviate working capital problems are also a valid option.
Funding & Business Loans
That said, raising funds via business loans can be a minefield. According to merchant bank Close Brothers: “only four out of ten SMEs have been able to secure funding from their chosen lender. Of these, 34 per cent felt that the capital available to them wasn’t enough to fund their investment plans, while a further 24 per cent said that the type of funding they had used was too expensive.”
This is where a specialist commercial finance brokerage like SME funding comes into its own. With access to over 200 lenders from banks, alternative and ‘fintech’ lenders through to specialist boutique funders there is seldom a situation where a lending solution cannot be sourced for a small to medium-sized business. Finance brokerages can often help even after the bank has refused lending. Most funding problems can be solved for most businesses in the UK, even start-ups, those with weak accounts, a troubled past or a poor credit history – including those with CCJs.
If you require help or advice about business loans (and there are many new funders offering fast and flexible products), SME funding can help you to select the one that is right for you. Applications can be made in minutes with approval and funding (subject to status) often on the same day.