Commercial Finance and Insurance
The last two decades, and particularly the years following the financial crisis of 2007-2008, have seen a change in the way that financial institutions lend money to businesses. With trust in the financial institutions severely eroded, governments introduced new regulators and a host of regulations to curb against what was seen as the banking sector’s cavalier attitude, with ‘caution’ becoming the new watchword. Borrowing has swung from being relatively easy to arrange, to difficult, with traditional overdraft lending being replaced by a range of asset-based lending facilities.
Asset-based lending (‘ABL’) means lending money with an agreement that is secured by customer-owned collateral: property and equipment, invoices and inventory being typical examples. Term loans, invoice financing and inventory funding are today’s methods of businesses securing the money they need, either for investment in growth or to maintain day-to-day cashflow.
- Term loans
Loan providers will provide term loans secured against both property, plant and machinery, it being possible to secure loans with a term of up to 20 years against commercial premises.
- Invoice finance
Invoice finance has become a popular method of providing cash-flow funding for both new and established businesses. Invoice finance involves a business selling the invoices it has issued to its customers to a finance house or specialized agency at a discounted rate, the agency going on to collect the full invoice value from the customer.
The benefit to the business is that any invoice it issues issettled immediately, albeit at a small loss, which helps its cash flow. In addition, and perhaps as importantly, there are no late-payers, collection costs or defaulters. The finance house or agencywho has bought the invoice collects the invoice value in full and, invariably is much more adept at recovering it within the invoice’s payment term.Another benefit is that the level of funding is usually greater than traditional overdraft facilities – 75-90% of debts as opposed to 30-40%.
- Inventory funding
Loans are made on a revolving basis against the value of raw materials, work in progress and finished goods. The reason that the loans are made on a revolving basis is that it’s financing a continuous cycle, ie: the raw materials become work in progress and then finished goods which are sold.
- Imported supply
Loans are made via trade finance facilities (import loans or letters of credit)
Enterprise Finance Guarantee
TheEnterprise Finance Guarantee (‘EFG’) is a government-guaranteed lending scheme aimed at helping SMEs that may struggle to secure finance as they are unable to provide the necessary security. Although the decision as to whether or not to make the loan rests with the participating finance house, the government meets some of the bad debt cost that may result.
How can One Financial Solutions help you?
One Financial Solutions is here to help you. We’ll talk to you about what you need and then introduce you to a specialist commercial finance broker who will work with you to secure a financial solution.
The commercial finance brokers we work with are acknowledged experts within the industry and have enviable relationships with a wide range of financial institutions throughout the whole of the market. They offer a complete service and can provide practical advice on all aspects of commercial finance. They can secure working capital, venture funding, development finance, bridging loans and asset-based finance schemes; help with business purchases and sales, including management buy-outs and buy-ins, and advise and assist with all aspects of share capital, proprietor loans, vendor deferment and mezzanine finance. They can also provide a lead role in liaising with all parties in these transactions including the financial institutions involved, accountants, specialized valuers and lawyers, and can write business plans, balance sheets, profit and loss statements and cash flow forecasts to support the proposal.
So, if you’re looking for help securing any type of commercial finance, please call us on 020 3714 9565, or ask us to call you by sending an email to