lack of knowledge stifles entrepreneurs ability to make an informed choice
Over the years I have visited with many clients that have struggled at some point or another with cash flow. Whether they have had a seasonal business or service sector business at some point for whatever reason they have found themselves in a position where they needed to go cap in hand to the bank manager and ask for an overdraft…
Most of the business owners have relayed how stressful the time was. One of the main stress points was the fact they knew in three months funds would be hitting their accounts.
While at the same time they feared. Should they not obtain some working capital quickly they,would struggle to meet their bill commitments this month.
This is what some Clients Told Me
The worst thing clients told me about getting an overdraft from the bank. Was in fact the process.
The time of uncertainty they had from speaking to their bank manager. To then finally getting the overdraft accepted and put in place.
In some cases, client reported:
- 3-4 weeks process
- Excessive security demands
- Dispropriate costs
Not forgetting the disruption it caused to their business.
let me share with you
Don't worry you are not alone
So if you are looking for a way to boost working capital, you can rest assured knowing that you are not alone. Noteworthy many business owners go through this stage in their business.
As the new generation of entrepreneur hits the world with their next innovative business idea. Through lack of information many business owners are still tied to the traditional methods of business funding.
1 in 4 of my readers will bank with one of the four leading high street banks. So when faced with a cash flow problem. Their first natural reaction will be to turn to the bank for help and support.
However! today I want to discuss the option of PAYG business finance unsecured line of credit.
With Growth Comes A Need For Flexiblity
In today’s market there is no longer such as thing as one size fits all approach to funding the growth of your business.
When you are growing a business one key aspect is flexibility.
You need to think about the option of PAYG business finance unsecured line of credit.
Just imagine you have a shortfall in working capital. However, you also know in three months funds are expected to hit your account.
You are looking for a solution, however one thing you know, you do not want a business lone.
So what are your options, I here you ask!
Well you could still pick up the phone to the bank manager.
Or you could consider PAYG business finance unsecured line of credit.
If you are not sure what PAYG business finance is let me explain.
In a nutshell it’s when you can access money up to an agreed amount as and when you need it. When you use the monies , you will just pay interest on the money that you use and remains outstanding.
It’s important to understand that you will only pay interest on the amount you have used and still must repay any outstanding balance. Noteworthy, you will not pay on the amount of credit facility that you have.
Just like you have seen in this example PAYG business finance gives business owners the opportunity to take advantages of special early supplier discounts. It lets business owners run their business smoothly. It gives you peace of mind when sales go up as well as down, seasons change, and cash flow has a few shortages.
For most business owners being able to act fast is crucial in the success of their business.
PAYG business finance enables your business to pursue opportunities quickly. Without the need to wait to build-up working capital reserves.
You need to purchase your stock for next season. Recently you have been contacted by your supplier and advised if you purchase your order this month only. You will benefit from a 20% discount off your total spend. This is an opportunity that will result in more profit adding to your bottom line. After consideration you estimate you will need £100,000 to place the order in full.
You make a quick application to your preferred PAYG provider and within 24 hours if successful your credit line is in place. For this example, let’s imagine you have obtained a credit limit of £300,000.
You decided to choose this particular provider because:
- You did not have to provide personal or directors guarantee.
- Plus the money offered was unsecured.
On receipt of your funds you made a drawdown of £100,000 to pay for next seasons stock. You secure your order and receive as promised from the supplier your 20% early order discount.
You then have the option to:
Repay the money in full at the end of the month.
Alternatively, you could choose to pay it back £50,000 one month then £25,000 the next month, and £5,000 over the next five months.
5 things PAYG business finance line of credit offers
Unlike other forms of business finance like overdrafts and business loans which can take weeks to process. This process is quick in some cases the funds can be ready for drawdown within 24 hours.
The key for the business owner is to have all their information ready. As a bare minimum you will need:
- Up to date management accounts
- Last years filed accounts
- Cashflow forecast
You only pay for what you use when you use it. Plus, there are no fixed monthly payments like when you take out a business loan.
So, lets imagine you have a lot of funds tied up in stock and have a limited working capital fund. You get the chance to secure a new contract. However, if you were to be successful is securing the contract. It would result in the need to invest in extra raw materials.
After reviewing the cashflow position of the business, rather than declaring yourself out for this contract opportunity. This flexible way of borrowing can offer an effective cashflow management tool for your business.
My only advice here would be make sure you only access enough money that your business needs.
4. Monthly management fees
It’s important to remember that no fees will be charged until you decide to draw down on the funds. Growth Street has a set utilisation fee of 0.4% +VAT, most fees will be calculated on the peak balance at the end of each calendar month.
5. PAYG business finance line of credit are NOT loans
Beware of this statement, I agree they are not loans, however once the funds are drawn down. For example, with Spotcap they become money repayable within 7-15 months.
How To Tap Into My Services For Free
Finally, here at WendyKipling.com I pride myself on sourcing and partnering with some of the leading names in PAYG business finance you can view all my partners here just click to go to my website.
If you decide to complete an expression of interest form for one of my partners. I will personally complete an initial review of your business proposal.
As part of my service to clients I offer a pre screening of your application, based on the eligibility criteria. Followed by submission and negotiation service with the chosen provider.
Furthermore, should your business be selected as a client I will provide the mentioned service free of charge.