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Fast Finance for SMEs

Most business owners and company directors have at some time or another kept the company afloat using personal cash whether this is a credit card or a personal loan.  Under ideal circumstances you wouldn’t do this but there are times when it seems unavoidable, especially during the current economic climate with so much financial uncertainty due to the Brexit vote.  Here in the UK, we have one of the largest percentages of small businesses, with 99% of British businesses being classed as SMEs which are particularly vulnerable to cash flow problems in times of economic uncertainty.  Keeping all of these businesses afloat in the wake of the Exit vote is going to present business owners in the UK with quite a challenge over the next year or so as the dust settles and our government prepares to forge new trading partnerships with countries worldwide.  Today we’re taking a look at some of the ways in which SMEs can raise finance fast when the banks are not being cooperative.

One of the first places that most people would turn is family members, most of whom will be only too happy to help out if they are able.  However, if this is not a solution that you can call on, then seeking an investor can be a good idea but you’ll need to bear in mind that anybody who ploughs funds into your business will probably want a stake in your company which may mean selling shares (stock) or assets.  When trading normally, this shouldn’t present too much of a problem, however, when a company becomes insolvent you’ll need to consider any impact this may have on creditors and take some legal advice to ensure that your creditors’ interests are secured.  It sometimes helps to seek the advice of a specialist insolvency company in such cases.

Your business may have tangible assets on the balance sheets or perhaps you have work in progress.  Why not check and see if it’s possible to raise some funds by remortgaging your company bricks and mortar (shops, offices, warehouses, etc.).  Check to see if you have any invoices due that could be used to generate the amount of money you need.  You could even choose to refinance the company’s assets if this would raise a sum large enough to solve your cash flow problems.  While you’re probably aware of invoice factoring, did you know that it’s possible to get a one off invoice?  You’ll probably need to find a professional service that can help you with this and it can be a really sensible way to deal with a short term cash flow problem.

However you plan to raise the finance to solve your cash flow problems, you’ll need to think carefully about this – whether or not a short term solution is the right answer for you and your business.  If the business is likely to do well and flourish in the long term, then it’s a no-brainer.  However, if you think that your business is likely to face ongoing struggles to remain solvent, then you may need to think about closing your business down at a time that is suitable for you, rather than being forced into liquidation by creditors.