Many businesses that we see that have been trading for less than twelve months have had various experiences with the high street banks. In our experience inexperienced account mangers get the customers jumping through hoops promising that the bank will do the deal only to be overruled when the deal goes for credit approval. In our experience it doesn’t matter how good the business plans are unless three years decent trading figures can be produced then it is unlikely that the banks will help.

The good news is that there a number of leasing and hire purchase companies that will lend to newly formed businesses. Hover in the case of our £40k LCD business any finance company will view this as a soft asset with very little security. Most finance companies will advance up to £10k per decent guarantor providing that the guarantor is a home owner, has a reasonable amount of equity in that house and they must also have a clear personal search profile. There are however one or two companies that may take a view on the overall deal an providing funding for the whole project. If that doesn’t work then we are in the territory of second charges on property!

We have seen one deal recently where up to eight brokers have introduced the same the deal to one finance company. And the worrying thing was that some of these introducers were in fact mortgage brokers with no experience in the asset finance market. At the end of the day there are probably only half a dozen lenders in this market so all paths lead to the same funder. If a finance company starts to get the same deal from many different sources they will not take the deal seriously because they will know the deal is being touted around the market. They have nothing to loose by providing onerous terms and conditions and their approach will be very much take it or leave it offer.

At XL Business Finance we have over 10 years experience in providing equipment refinance solutions. We do things slightly differently. Firstly we know all the plant and machinery valuers which the different finance companies use. We wll go iect to these valuers and get an idea of the level of security in the deal. We then provide a realistic opinion as to the amount of cash that can be raised against the kit in questions. We will then provide a proposal to the most appropriate funder having already dome our homework on the kit. A clean and realistic application will have a much greater chance of success.!!

XL Business Finance has been helping businesses with business finance for over ten years. Whether it be finance lease or hire purchase we can structure the application in order for you to get the best chance of success. The problem is that all finance companies will view digital kit as unsecured lending and therefore the business must have a very strong balance sheet, be trading for more than 3 years and be profitable. If finance is not forthcoming with a prime lender then a business may find themselves caught between a rock and a hard stone. The business isn’t strong enough for a prime or high street finance company however the other sort of finance company is an asset based lender which will view the kit as have no security and as such will not provide funding. There are a number of sales aid finance companies which specialise in financing this sort of kit however they all require personal guarantees and they will only lend a max of £10k per director. For obvious reasons most directors don’t like to provide guarantees but for many businesses this may be the only option.

There are still many non bank owned financial institutions providing hire purchase and finance lease facilities for new start businesses. Providing that the directors are home owners with a bit of wool on their backs it may be possible to provide finance depending on the cost of equipment and the quality of the guarantor. Most finance companies will require a personal guarantee which says if the business doesn’t pay then the director as an individual will be liable. The directors must definitely be home owners with little or no adverse credit. If in doubt with your written permission we can do a personal  credit check on your behalf.

In addition invoice finance in the form of factoring should be relatively easy to obtain. Again providing the individuals as directors are relatively clean and the debtor book is of reasonable quality a decent locally based invoice factoring company will be able to provide you with cash against your unpaid invoices.

 Which finance company is best for your particular needs depends on the industry that you operate , your geographical location and your estimated turnover. Again XL Business Finance will be happy to assist you find the most suitable funding partner.

The minimum grant available is  £10k and provided that all other areas of funding have been exhausted then funding may be awarded for between 10-35% of the total project cost therefore other sources of business finance must be secured to prove that the project is financially viable.

Following an initial meeting and a draft a project proposal which is discussed with the funding body and we get feedback within 2/3 days as to whether or not the business is likely to be successful with a grant application. It is important that you use  the best possible expertise and experience in making sure that the application is dealt with in the correct manner to obtain the best possible chance of success. It is  possible to go though the process yourself however experience suggests that it is better leaving it to the experts. From start to finish the process should take no more than six weeks however a business left to their own devices may take as long as six months wasting time energy and money. Far better to take the money now pay someone to do it and avoid making a mistake which leaves your application worthless.

Any business which has applied for the ECFG funding and has been declined may find a greater chance of success with the possibility of a grant. XL business Finance has over 10 years experience in providing innovative funding solutions and this is just one of the many areas we may be able to add value to your business.

Once upon a time it was possible to get a package deal with the bank. They might do one product as a loss leader and as such the overall funding was priced very competitively. The problem of having all ones eggs in one basket has become evident over the last year or so. Banks have been found to wanting at times and it is very true that they are great at giving their customers umbrellas but as soon as it starts raining they want them back.

In our opinion the independent business finance companies provide a product that is very competitively priced however the levels of service and flexibility can far exceed those of the banks. This is very true when it comes to factoring and invoice discounting. Whilst for certain types of business there are certain banks that we would recommend as a whole independent provide a far more approachable and flexible service.

XL Business Finance has been helping its clients for over 10 years to obtain the most appropriate invoice factoring and invoice financing facilities. The cheapest is not always the best and a by undertaking a brief review of your business we can provide two or three funders ( probably ones you may not have heard of before) that will knock the socks of the banks in providing the right level of service and flexible funding that your business requires.

In addition 55 percent of the businesses feel that the economy will have recovery by the summer of this year. However one in five feel that it will be two years before the economy fully recovers suggesting that certain sectors of the economy have been hard hit.

This Business factors index has been provided by Bibby Financial services. The index tracks small businesses turnover since 2007 and the trends and information have be collated with the results of over 300 business interviews.

The optimism must be offered with caution. One in five feel conditions are worse than they were 12 months ago. In addition many have had to take cost cutting measures. And one in five don’t think the economy will ave recovered in two years.

Firms in the North West with many involved in Manufacturing have had a tough time during the recession and while we don’t expect an immediate recovery it is clear that many businesses have experienced a difficult few months. Although 2010 ha already provided a number of challenges such as the adverse weather conditions  a weak pound is fueling export growth and as such confidence is slowly starting to improve. It suggests that moving forward business are optimistic about their prospects of a recovery.

The upshot is  that it will continue to be difficult to obtain business finance. However XL Business Finance has experience of providing innovative finance solutions whether it be equipment finance refinance of existing equipment. We are also vastly experienced in providing invoice finance solutions whether it be factoring or invoice discounting. Give us a ring a ding ding.

Structured lending or asset based lending takes a slightly different approach to providing loan facilities. Asset based lending usually starts with an invoice discounting facility which will release up to 90% of a businesses unpaid invoices.  On the back of this it might be possible to obtain some form of revolving stocking facility typically at 50% of  the value of the stock. An asset based lender will also advance an amount against the value of the assets probably around 70% of the forced sale value. Money is advanced typically with a 3 year pay back. Certain finance companies also provide Enterprise Finance Guarantee Funding usually at the amount equivalent to any directors contribution to the business.

The problem with both these two forms of financing is that you are relying on one finance provider and as such having eggs all in one basket will leave the funder with an awful lot of control over your business. Whilst it is not possible to split stocking finance away from the invoice discounting it is certainly possible to use a unrelated leasing company to provide funding against plant and machinery. Refinancing existing machinery is relatively easy to do provided there is some value in the kit.

For example it is unlikely you will get a print finance specialist to finance an expensive  digital printer. A print finance company is more interested in the residual value of the equipment and their exit route if they  such a machine came back to them in a distress situation. Print finance companies know the litho market and a certain degree the flexo market very well and as such tend to stick to financing these sorts of machines.

It is therefore more likely you will get finance for a digital piece of kit or a non ltho piece of kit from a traditional balance sheet finance company. So long as we can evidence serviceability, there is no adverse information and your business is profitable than you have a good chance of geting finance approved.

The problem is when a business that has been struggling wishes to buy digital kit which is perceived as having very little security. There isn’t enough value in the kit to get the print finance companies interested and the balance sheet isn strong enough to justify an advance from a high street bank owned finance company. Potentially the only way is to provide additional security by taking a charge over existing kit or even property.

At XL Business Finance we would recommended that if possible you should only use your bank as a clearing facility. An invoice discounting or factoring facility is preferable to a bank overdraft. Invoice finance grows with the business  whereas a overdraft which is repayable on demand will often be fixed at a set amount which depends on the level of security available. An overdraft amount is nearly always never enough.

Also there is absolutely no reason why you should need to have a commercial mortgage with your own bank. There are a number of specialist commercial mortgage institutions offering excellent deals. keep your commercial mortgage separate from your own bank to prevent the bank having too much control, on your businesses finances.

Equipment finance by way of hire purchase and leasing can easily be arranged via third party leasing companies. Again using a different finance company will prevent having too many eggs in one basket.

XL Business Finance has been helping many businesses for over 10 years to obtain the most flexible and competitive funding available in the market place. We understand how to structure a proposal and what information the finance companies require resulting in a very high conversion of our applications.