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Why businesses change their funding

28/03/2022

Whether due to a sense of loyalty, a belief that nothing else is available or they simply have other priorities, many businesses choose to stick and persevere with funding facilities they may have in place – even when they’re failing to provide the required or desired level of support or service.

A bit like a mortgage, car insurance or mobile phone contract, finding the time to compare and contrast your funding facilities against the wider market can result in a more suitable solution being identified and benefits gained.

It’s not just that a new facility could increase the amount of funding available, improve service or perhaps reduce what you’re paying. Relying on a facility that does not suit your business’s current needs or future ambitions can actually do more harm than good.

Here, we look at some of the primary benefits of benchmarking your existing funding against the wider market, and what should prompt you to do so.

Identify something more suitable

There are a number of ways businesses can raise funding nowadays. From the more simplistic options such as term loans and overdrafts to facilities which release funding for a specific purpose, it’s important for businesses to have the right facility in place for its unique set of requirements.

For instance, do you need to purchase new kit for your business? Do you find it a challenge to pay suppliers and other day-to-day commitments due to the time it takes for customers to pay your invoices? Are you dipping into your overdraft to pay VAT, or finding it a challenge to keep up with loan repayments? Or is your existing facility simply not providing the level of funding you need to achieve everything you’d like to?

Given the wide range of solutions and lenders available, it may be that there are products and lenders out there which can provide far more support or flexibility to your business than you’re currently receiving.

Improve your funder relationship

Having a strong relationship with your funding partner can be just as important as the level of funding you can access.

Someone that understands your business, how it operates and the type of customer you sell to will typically be more supportive than someone who doesn’t have this insight, or you rarely hear from. Understanding and communication can lead to a more suitable facility and sometimes a better level of funding.

Unfortunately, though, not all funding relationships are built to last. Whether your client manager changes regularly, they don’t understand your business and its needs or communication becomes frayed, sometimes relationships can break down beyond repair and it may be advisable to explore alternative options.

Even where the relationship is adequate, it may be that other lenders can provide something extra that can make a big difference to your business.

Increase flexibility

Particularly with fast-growing businesses or those with seasonal trading patterns, it can be frustrating when your funding is quite rigid in structure or unable to easily adapt to changes in demand. It may be that your lender is slow to respond to additional funding requests.

Some finance facilities are far more flexible in nature than others due to the way they work. Loans and overdrafts are notoriously rigid in structure, for instance. But from releasing cash against the value of new invoices to accessing funding for a specific purpose, there are a number of flexible ways businesses can raise funding.

Reduce admin

Due to recent technological advancements, there has been a real boom in the prevalence of more tech-savvy lenders who can easily integrate with your own systems and accounting packages to reduce the administrative burden, provide faster access to funding and make managing accounts easier.

By the same token, other lenders have been a little slower to update their offering. So it’s not surprising that some companies choose to switch to funders that can offer better systems, and regain the time to focus on other aspects of their business.

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

Gain additional benefits

Some finance facilities offer much more than purely finance.

Aside from the variance in the level of service provided by different funders, some facilities can incorporate additional features such as a dedicated credit management service or bad debt protection.

So if you’re finding that customers are regularly paying late, or you’re concerned about the rising level of insolvencies in your sector or amongst your customer base, it may be worth exploring some of the facilities which can offer these.

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.

Reduce costs

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 value you feel you’re getting from it.

That’s why many businesses benchmark their current facility against others on the market to see if there are more cost-effective solutions available that still deliver the required funding and levels of service.

It is important, however, that cost alone is not the sole factor when making a decision. 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.

Gain better alignment

You may find that your business no longer requires the facility it has in place. Although the business may still benefit from cash flow support, your existing facility may provide more than you need, or perhaps it’s not providing the right kind of support.

So comparing your facility against the wider market could help to identify something that’s better aligned with your current and future requirements – and even provide bolt-on services that add extra value to your business.


If you would like to explore whether there’s a more suitable finance facility available to your business, feel free to contact our expert team of funding consultants. An award-winning and FCA-authorised commercial finance broker, we have 25 years’ experience of matching businesses’ requirements with the most suitable facilities and lenders. Call 0800 9774833 or schedule a call back at a convenient time to find out more.

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Some of the funders we work with

  • PNC Business Credit
  • Skipton Business Finance
  • Optimum Finance
  • Praetura Invoice Finance
  • Secure Trust Bank
  • Giant
  • Aldermore Invoice Finance
  • InvoCap
  • MarketFinance
  • Time Finance
  • Shawbrook Business Credit
  • Davenham Trade Finance
  • iwoca
  • Tradeplus24
  • Nucleus Commercial Finance
  • Berkeley Trade Finance Ltd
  • Sonovate
  • Boost Capital
  • Clear Factor
  • Leumi ABL
  • Haydock Finance Ltd
  • Woodsford Tradebridge
  • inFund
  • Merchant Money
  • Accelerated Payments
  • Trade Finance Partners
  • Blazehill Capital
  • IGF Invoice Finance
  • Selina Finance
  • Lloyds Bank Commercial Finance
  • Team Factors
  • ABN AMRO Commercial Finance
  • Asset Advantage
  • Close Brothers Invoice Finance
  • Investec
  • Bibby Financial Services
  • MaxCap
  • Nationwide Finance
  • Creative Capital
  • 4Syte
  • FIBR Tech Limited
  • Peak Cashflow
  • Regency Factors
  • Santander Corporate & Commercial
  • Roma Finance
  • Barclays
  • Pulse Cashflow Finance
  • Ultimate Finance Group
  • Royal Bank of Scotland
  • Davenham Asset Finance
  • Partnership Invoice Finance
  • Castlebridge
  • Metro Bank SME Finance

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

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