Now is the time to benchmark your funding
For many businesses this year, accessing cash has been at the front of their minds, and they are likely to be using a very different combination of funding facilities than they were this time last year.
While the funding options some businesses have used during the pandemic have been critical to their survival, others may have sought funding as a precaution, to avoid making redundancies or to adapt their businesses and allow them to continue trading.
Whatever your reasons have been for taking out funding, whether it was before or after the pandemic hit, it is safe to say that 12 months ago no businesses could have totally predicted the position they’re now in.
For those who have had to make quick, drastic decisions in order to support their business, it’s time to think about what you can do now to help your business navigate the months to come and ensure the funding you have in place will support this phase. Likewise, while not all businesses will be struggling at the moment, benchmarking funding is still essential to help you prepare and protect your business for things to come.
Finding the right fit
Benchmarking your funding can help you track how your business has changed and give you more insight into your cashflow, but the main goal is to check your current funding is the right fit for your business.
Sometimes time pressures or a lack of market insight can lead to businesses taking out funding solutions that are not right for them, but more often their requirements and challenges will change over time, and a new facility may be a better fit. The is particularly likely currently given these unprecedented trading times.
Here are 3 things to consider when exploring how well your funding works for you.
The main thing to consider when reviewing your funding is whether or not it is still meeting the needs of your business. Sometimes a funding facility is selected by a business to meet a specific need, but a strong funding plan, involving one or more facility, should be able to support your business in a number of ways.
Another key point is to look at how your different facilities are working together, or if you only have one funding facility, how it could work with others in the future. Combining the right facilities can be a great way to make sure your cash flow is protected, and your business can continue to thrive.
It is also important to consider whether the funding you have in place now will continue to work for your business in the future. Although you can’t always predict what the future will hold, your funding should be able to support any planned growth and also be able to help you through any more difficult periods.
Preparing for challenges ahead
If you’re benchmarking funding at this time, it’s important to give some thought to the challenges that lie ahead.
It goes without saying that the impact of the Covid-19 pandemic will continue to rock businesses and, despite the positive news of the vaccine being rolled out, UK businesses are still facing closures and restrictions that make it more difficult for them to trade.
Additionally, next year will see businesses having to navigate the end of the furlough scheme and the reality of repaying loans that were taken out under the government support schemes this year.
For some businesses the real financial impact of the pandemic may have been delayed by these support schemes, and now is the time to prepare and make sure the appropriate funding is in place to keep your cash flow healthy.
As well as the pandemic, businesses will also have to start thinking again about the impact of Brexit , and begin any preparations they need to put in place to safeguard their business.
Support from a broker
If you are currently benchmarking your funding and feel that it doesn’t meet your current and future needs, we could help you find the optimal funding solution going forward.
As an independent, award-winning commercial finance broker, we specialise in helping businesses find funding that really works for them and can support you throughout the whole process of securing funding.
To set up a call with a member of our team, use our request a call back form and let us know a time that suits you.