Blog

Why businesses change their funding (and signs you should too)

04/07/2016 / Comments 0

Why businesses change funding

Whether it’s an odd sense of loyalty, fear that nothing else is available or simply laziness, many businesses find a funding facility and then stick with it – even when they’re not entirely happy.

But relying on a facility that does not suit your business’s needs or ambitions can actually be doing more harm than good.

Fortunately, more and more businesses are realising this and have gone in search of products more suited to their company’s evolving needs.

Here are seven factors that encourage businesses to switch or ditch their funding facilities. Can you relate to any of them?

1. Breakdown in relationship

Having a strong relationship with your funder can be just as important as the level of funding you can access. But, unfortunately, not all funding relationships are built to last.

Whether it’s because your client manager has left, your funder doesn’t understand your needs or even simple miscommunication, sometimes relationships can break down beyond repair.

When this happens businesses often look for an alternative facility that is better aligned to their expectations and requirements. And, with so many providers to choose from, there’s no reason why you should settle for anything less.

Here’s how we helped a wholesaler find a more suitable funding partner after they experienced unsatisfactory service and a deteriorating relationship with their lender. 

2. Restricted cash flow

Every good business owner knows that cash is king. So, when a funding facility isn’t providing enough working capital to ensure day-to-day commitments can be met, it’s not surprising businesses look to see if better options are available.

Especially with businesses that trade on credit terms, having a funding facility in place which bridges the gap between paying suppliers and getting paid can be vital.

3. Lack of flexibility

Particularly with growing businesses or those that have seasonal trading patterns, it can be frustrating when your funding is unable to easily adapt to changes in demand. This is why some businesses find having a flexible funding facility in place is extremely important.

4. Inadequate systems

With online banking and other technological advances giving businesses the opportunity to manage accounts more easily, it’s not surprising that some companies prefer to switch to funders that offer better systems.

Without fast and easy access to accounts some businesses could be wasting valuable time that could be better spent on other aspects of business management.

If this is something that’s important to you, finding a funder that offers systems which are easier to use could give you valuable time back to concentrate on your business.

5. Seeking additional benefits

Some businesses require more than just a cash flow boost from their funder.

For example, for many businesses it can be beneficial to have a facility which incorporates additional services and benefits such as credit management or debtor protection.

In these instances, it makes sense for the company to look for a facility which incorporates all of the features they are looking for.

And, with new products entering the market all the time, there’s bound to be something out there that you might not have considered in the past.

This free funding guide looks at some of the features of popular finance products to help you find the best facility for your needs. 

6. Too expensive

Whilst the cheapest funding option isn’t necessarily the best for your business, it can be frustrating when the cost of your funding facility outweighs the level of service provided.

As a result, many businesses benchmark their current facility against others on the market to see if they can get a funding solution that is more valuable to their business. 

However, cost alone should not be a deciding factor. What’s more important is that the cost of the facility is proportionate to the service provided and the opportunities it enables your business to access.

7. No further need

Then there are times businesses simply have no further need for the funding facility. Perhaps the business has been sold, or maybe they prefer to finance their day-to-day activity from their profits.

If you fall into this category remember that borrowing money isn’t just about raising funds. It can also bring a number of additional benefits and can improve your chances of commercial success, as this blog post shows.


If you can relate to any of these situations or are simply dissatisfied with your current funding arrangement, it could be beneficial to benchmark the funding options available to see if there is a better fit for your business.

But, with the funding market constantly changing and so many products and providers to choose from, it can be hard to identify the most suitable facility.

This is where talking to an independent commercial finance broker could help.

Recognising that every business is different, a good broker will get to know your business’s funding needs and challenges in order to identify the right facility in terms of funding level, service and cost.

To see if we could help your business find the best funding for its requirements contact us today on 0800 9774833 or info@hiltonbaird.co.uk.

Comments

No comments yet - be the first!

Funders we work with

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

Authorised and regulated by the Financial Conduct Authority (FCA number 730445)
We are a credit broker and not a lender and offer credit facilities from a panel of lenders

Our website uses cookies. For more information about managing cookies, visit our Privacy and Cookie Policy. Continue