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6 signs your funding is failing you

26/05/2015 / Comments 0

6 signs your funding is failing you

Is your funding holding you back?

We’ve said it before and we’ll say it again. “Cash is king”, which is why it’s vital to make sure that your business has the right funding in place to meet both your long-term and short-term needs.

With this in mind, we look at 6 signs your current funding facility is failing you and what you can do about it.

1. You’re unhappy

This is possibly the most obvious sign, but many businesses simply ignore it. Whether it’s an odd sense of loyalty, fear that nothing else is available or simply laziness, some businesses just sit back and put up with a service that they’re not happy with. But this doesn’t have to be the case. With so many options available, from traditional banks to independent funders, there’s really no reason to stick with a service that is unsatisfactory.

In these situations communication is key. Talk to your funder and mention any issues that you have. The funder may be able to address the problem, and thereby improve your experience. If they seem uninterested in improving your experience it may be time to move on. Make a list of all the things you like and dislike about your current facility and use this to guide your research to see if there is a better option for you.

2. The cost outweighs the level of service

How much have you spent on your current funding? Is this proportionate to the level of service provided and the opportunities it allows you to access? Some funding facilities will simply boost your cash flow whereas others will have additional facilities included, so it’s important to remember that, when it comes to funding, the cheapest option isn’t necessarily the best.

First, learn if there is anything you can do to make your current option better value for your business. Will your funder give you a better deal for your loyalty? Can they give you added services to make the service better value for money?

Benchmarking different funding options will give you a good indication of what will work best for your business.

However, with numerous options available, it can be hard to identify the right one for your business. This is where an independent finance broker could help. Recognising that every business is different, a good broker will work with you closely to fully understand your business’s funding needs and challenges in order to identify the right facility in terms of funding level, service and cost so that your funding works for you and not against you.

3. You spend lots of time managing your cash flow

With the right facility in place managing your cash flow should be easy. So if you find that you spend a lot of your time on cash flow management it’s likely that your current funding is holding you back.

First, look at your existing facility – does the amount you can access provide the right headroom for your day-to-day activity? If it doesn’t, will your current funder allow you some flexibility to access more as and when you need it? If not, is there an alternative funding option that will allow you to access more cash to help your business reach its potential?

For example, invoice finance is a flexible funding option that allows you to access up to 90% of an invoice’s value within 24 hours and, unlike bank loans or overdrafts, the amount you can access grows in line with your sales ledger. By boosting your cash flow immediately, invoice finance allows you to bridge the cash flow gap between paying suppliers and receiving payment from your customers so that you don’t have to spend as much time worrying about balancing your cash flow.

4. Funding levels don’t support your plans

Especially in growing businesses it can be frustrating when you become restricted by a lack of funds. If you’ve been finding it hard to capitalise on new business opportunities as they arise, your funding could be the problem.

One of the biggest issues growing businesses encounter with their funding is flexibility. If your current funding facility has little room for flexibility you could find that, when faced with increased demand, you have to turn down custom because you don’t have the resources to complete the order.

In situations such as this you could try talking to your existing funder to see if there is anything they can do to help. Our blog post offers 10 ways to make your business more attractive to lenders.

If your current funder is unable to help you, don’t give up, approach another funder equipped with your new knowledge.

5. The funder doesn’t understand your business and its needs

It’s important to recognise that a funding facility shouldn’t just be about how much you can access but also whether the funder understands your business and its needs.

No two businesses are the same so their funding facilities shouldn’t be either. Funders who take the time to get to know their client’s business cycles and challenges are often able to advance additional funds to cover specific activities and events or find a way to work with you through a slower trading patch.

Is there a dedicated person who you can speak to whenever required who understands your business? Having someone at the end of the phone who knows you and your business will enable you to get the best service possible.

6. You haven’t researched your options in more than a year

Whilst this isn’t technically a sign that your funding is failing you, it could be a sign that you’re not doing all you can to ensure you’re getting the best deal for your business.

The market is constantly evolving and changing. So, if you haven’t been keeping up to date with changes, you could be missing out on new products and services that offer your business better potential for success.

When you secured your current funding facilities it may have been the best option for your business at the time, or it could have been a quick fix that you planned to reassess later and kept putting off. Whichever situation your business was in then, you should make time to regularly check your options. As your situation changes and the market develops the options available to you could change drastically.

Going forward you could set up a Google alert to notify you of any funding news or make a conscious effort to keep an eye out for the latest developments in the funding arena. This means you’ll be aware of any new funding products or services that your business could benefit from.

If you need help reviewing your existing facilities, as an independent commercial finance broker, Hilton-Baird Financial Solutions can help. Call us on 0800 9774833 or email info@hiltonbaird.co.uk to speak to our team of funding consultants.

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Funders we work with

  • Catalyst Finance
  • Shawbrook Business Credit
  • Ultimate Finance Group
  • Henry Howard Cashflow Finance
  • Secure Trust Bank
  • Asset Advantage
  • Innovation Finance
  • Pulse Cashflow Finance
  • Ashley Commercial Finance
  • Royal Bank of Scotland
  • Outsauce
  • Calverton Finance
  • Lloyds Bank Commercial Finance
  • Metro Bank SME Finance
  • Working Capital Partners
  • PNC Business Credit
  • Factor 21
  • Partnership Invoice Finance
  • Roma Finance
  • Everline
  • Platform Black
  • Davenham Asset Finance
  • Davenham Trade Finance
  • IGF Invoice Finance
  • Skipton Business Finance
  • Team Factors
  • Hitachi Capital Invoice Finance
  • Santander Corporate & Commercial
  • Bibby Financial Services
  • Barclays
  • Nucleus Commercial Finance
  • Close Brothers Invoice Finance
  • Woodsford Tradebridge
  • Aldermore Invoice Finance
  • ABN AMRO Commercial Finance
  • 1pm
  • Creative Capital
  • Leumi ABL
  • GapCap Cashflow Finance
  • Market Invoice
  • Amicus Commercial Finance
  • iwoca
  • Regency Factors
  • Invoice Cycle
  • Trade Finance Partners
  • Assetz Capital
  • Positive Cashflow Finance

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We are a credit broker and not a lender and offer credit facilities from a panel of lenders

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