Raising finance to grow your business is not about today, it is about tomorrow. The right finance package can be a positive force within your business, one which can be used to propel your business forward.
Building a bigger, better future… that’s what we do
When you’re looking for finance to grow, a lender will want to see a well constructed Business Plan. A great Plan sets out a clear vision for the future, a future in which you soar above your competition.
The whole process of raising finance can be a distraction and divert your attention away from what’s important. With mounting priorities it’s a case of which one has to wait. Typically raising finance is one task that can grind you down.
Kicking off our latest Bulletin, a report from UHY Accountants finds that the UK is in a business start up boom. The figures from HMRC reveal that more businesses were started in 2020 compared to 2019 as people had the opportunity to start up the business of their dreams.
Staying with start ups, we look at the announcement form the Start Up Loan Company that it has hit a new milestone in terms of money lent out and the number of new businesses supported.
To close, a survey from TSB highlights how few people are either aware of what a credit score is or of their score. When it comes to borrowing money, we look at how important your credit score is.
To start this week’s Business Finance Bulletin, research from Hitachi Capital Business Finance has revealed that businesses are now less fearful of contraction or collapse compared to last year. The swing in confidence is a signal that businesses are seeing growth prospects again.
When businesses get back into a growth phase, that typically brings with it a need for additional working capital. This has been borne out in a survey from unsecured business finance provider Iwoca. We look at the findings which highlight an increase in demand for short term, unsecured finance.
Wrapping up this Bulletin, we have our monthly review of the latest insolvency figures. We look at how the number of firms entering into some form of insolvency arrangement is on the increase.
Opening this Business Finance Bulletin, after being the key source of finance for 12 months the final figures are out for the Bounce Back Loans and CBILS schemes. The figures reveal the extent of finance taken on by businesses and now it is payback time.
For start ups and smaller businesses getting on the ladder to build a credit score can be difficult, but a new service announced by Tide Bank will ease this problem. Tide’s Credit Builder is designed to help smaller businesses create a credit footprint thereby making future access to finance easier.
To close, we review the latest figures from the Finance and Leasing Association which reveals a significant return to usage of asset finance facilities such as leasing and HP. This is a good sign of the continuing return of confidence among businesses.
Economic recovery can often bring another set of challenges which is to spot and tackle financial distress. Opening the latest Business Finance Bulletin, we look at a new guide from R3 on identifying financial distress and the options available to deal with it.
Having access to support and guidance from industry experts is always welcome. A number of credit experts have launched a support group to assist businesses with questions on how to manage credit-related problems. Could this resource help you avoid falling foul of late payment and bad debts?
Managing cashflow is a key priority for any business. To wrap up this Bulletin, we review the forthcoming launch of Tide Bank’s Cashflow Insights app which is designed to help businesses better forecast and control their cash position.
Companies entering an insolvency arrangement is starting to increase. Opening this Business Finance Bulletin, we review the latest insolvency figures and the government’s extension to the Statutory Demand and Winding Up Petition moratorium. Will this continue to keep insolvencies low?
As part of the government’s strategy of ‘levelling up’, we have news of the launch of The UK Infrastructure Bank. Whilst it won’t directly lend to small business, will there eventually be a positive knock-on effect?
To close, a review of the latest annual Small Business Equity Tracker report reveals that 2020 saw the largest amount of equity investment made in small and medium-sized businesses.
With the economy starting to get back on track, we open this Business Finance Bulletin with news from the Finance and Leasing Association of large increase in leasing and HP deals written in April. Although still well off the 2020 figures, encouragingly the gap is beginning to close as business investment activity increases.
Business confidence also continues to grow with a survey from the British Chambers of Commerce and Funding Circle revealing business activity levels and sentiments for the future. The survey findings highlight how resilient businesses have been.
To close, analysis from online accountants Mazuma uncovers how many businesses are concerned about their ability to pay back their Bounce Back Loan. What are your options if your cashflow is still tight?
When the Recovery Loan Scheme was launched in April, the number of accredited lenders on the panel was limited. With the panel lenders now expanding, in our latest Business Finance Bulletin we review the new lenders focused on specific regions of the country and how they are broadening the Scheme’s reach.
Business is tough enough as it is but identifying and dealing with fraud can be an unwarranted distraction. HSBC has announced the launch of an app designed to flag new scams and keep you up to date with trends in fraud and cyber crime. Could this app help you keep away from the fraudsters?
To close this Bulletin, we review the latest figures from the Finance and Leasing Association which reveal that HP and Leasing deals are on the increase. Following the easing of restrictions, it seems that businesses are again beginning to re-invest.
If you prefer to read what’s featured in this Bulletin, here is a transcript.
Regionally-focused lenders are starting to offer finance under the Recovery Loan Scheme. HSBC launches fraud awareness app; and the latest asset finance figures shows that growth is back. All of this in the latest Business Finance Bulletin.
Recovery Loan Scheme Lenders
Let’s start this Bulletin with an update on the Recovery Loan Scheme.
First of all, a quick reminder of what the Recovery Loan Scheme is. Well, it’s the replacement for CBILs and Bounce Back Loans. It’s designed to give funding to businesses who are now looking for growth money, or recovery money.
Those lenders who have applied to go onto the panel and been successfully accredited by the British Business Bank will now be able to offer finance to those businesses who were looking to expand the game. When the scheme was launched at the beginning of April I mentioned that the panel was quite tight, quite small, but I said, towards the end of May, early June, we would see the panel beginning to expand. And that has now happened.
The good thing to see is that we’re starting to see more regionally-focused lenders being accredited under the scheme. These lenders are very much focused on certain areas of the country, which would benefit smaller businesses because they will be a much more interested in supporting smaller businesses in those areas.
Who are these lenders Who’ve been accredited to the Scheme?
We’ve got ART Business Loans, covering the West Midlands; BCRS covering the West Midlands as well; Enterprise Answers covering Cumbria, North Lancashire and the Yorkshire Dales; and GC Business Finance covering Greater Manchester.
So you can see the North of England is well represented. If you’re in those areas, hunt out those lenders, because they may be able to support you.
We’ve also seen other additions to the panel. The bigger lenders announced in the last two weeks are Starling bank and also Funding Circle. Funding circle, had about 27% of the CBIlS loan market last year, so no doubt they’re going to be a big player in this.
It’s great to see that the panel is now expanding. If you want to know if you can be eligible and want to know a little bit more about the Recovery Loan Scheme, we’re happy to have a chat. Just drop us an email info at business loan services.co.uk and we’ll happily chat with you about all of the options available to you.
HSBC Fraud and Cyber Awareness App
In the current business environment it can be hard enough to make money as it is, but even tougher if you lose that money to fraudsters. According to the National Crime Agency, businesses are losing up to £140 billion per year to fraud. HSBC have come up with a great idea; they are launching a free app to download called Fraud and Cyber Awareness app.This app will help you keep on top of the new trends in scams.
First, a quick look at the top three scams that HSBC have identified.
First of all, purchase scams where non-existent products are bought. That’s costing businesses on average £3,000 a year. Invoice scams, that’s costing businesses, £24,000 a year. And impersonation scams; that’s costing on average £6,500 per business.
So we can see there’s a lot of money to be lost here.
This app is a great addition to your toolkit to keep you aware of what’s going on in the world. When you download the app, the app will give you notifications of the latest scams of all the new trends going on. So it means that you can get on with doing your business and rely on the app then to keep you up to date and what to look out for.
If you’re interested in downloading this app, all you have to do is go to the HSBC website
A great addition to your toolkit to make sure you keep the money in your bank account, not the fraudsters bank.
Asset Finance and Business Growth
Good news coming out, confirming that business activity, starting to get back on track again.
The latest figures have been released from the Finance and Leasing Association, which shows the deal volumes of asset finance facilities are starting to increase again.
The members of the Finance and Leasing Association offer products such as HP and leasing and deal volumes for March have been released.
There’s been a 15% increase in the amount of business done in March, 2021 compared to March 2020. In the first quarter of this year, compared to the first quarter of 2020, the volumes were only up by 1% though, but it’s good to see volumes increasing in March overall.
However, on a 12 month basis to March the volumes over the whole 12 months is down by 20%, but at least we’re starting to see some traction coming back into the marketplace.
Where’s the deal volume coming from? Commercial vehicles, that’s leading the pace with a 20% increase in the amount of deals written in March and also business finance equipment, That’s up 14%. So it’s good to see the businesses are starting to reinvest again. I am sure that doing April and May, those figures would show further increases.
If you want to know more about asset finance and whether it could work for you and your business to get in touch with us, just drop us an email info at business loans services.co.uk. It is good to see the UK economy getting back on track
That’s it for another Bulletin. As ever, I hope you enjoyed watching it and if you did, please, don’t forget to give it a like, a share and subscribe to this channel. Thanks very much and I Look forward to the next time. In the meantime, have a successful and profitable week.
According to the latest Lloyds Bank Business Barometer report, business owners are continuing to feel increasingly optimistic about their future prospects. With optimism and confidence levels reaching new highs we look at one key peril to watch out for.
If you have a idea for a great new business and you need an incentive to get started then check out a business start up competition launched by Tik Tok, the video sharing platform. With a cash prize and an array of support and mentoring could this be the push you’re looking for?
Bank charges are often a bone of contention. To close this Bulletin, we look at the announcement from TSB of an offer of up to two years free banking. One to look at if you wish to reduce the cost of running your day-to-day business banking.
Kickstarting this week’s Business Finance Bulletin, the Recovery Loan Scheme has had a quiet start since its launch but the number of lenders on the panel is now slowly increasing. We look at the latest additions and what continues to hold the Scheme back.
The Start Up Loan Company is encouraging younger people to think about becoming entrepreneurs. This is off the back of an analysis of the 80,000 loans they have distributed which reveals a large portion have gone to new business owners in the 18 to 24 year old age range. How could the loan assist you?
To close, a look at findings from the latest Lloyds Bank UK Recovery Tracker, which uncovers that the UK’s key sectors are back on the path to growth.
If you prefer to read about this week’s news, here’s a transcript of the content…
More lenders offering the Recovery Loan Scheme; young and budding entrepreneurs encouraged to look at a startup loan; and key UK sectors of back on the growth trajectory. All of this in the latest Business Finance Bulletin.
Recovery Loan Scheme Lenders
The Recovery Loan Scheme launched on the 6th of April, and there hasn’t been an awful lot of noise in the marketplace as regards how successful or otherwise that it’s been. Before we take a look at why this is, let’s remind ourselves quickly of the key features of the Recovery Loan Scheme.
It’s designed to help promote growth, so if you’re looking for additional working capital or cash; buying plants and equipment and machinery, then this is the loan for you. If you don’t want to provide a personal guarantee, you can borrow up to a maximum of £250,000 with no personal guarantee. If you’d want to borrow more than your guarantee would be limited to 20% of the balance.
The interest rate is capped at 14.99% and in terms of the loan term, it depends on the type of product you take be it would be a maximum of three years or a maximum of six years.
Demand at the moment, is still a bit muted and it’s all down to the makeup of the panel. During the early days, it was really only the high street banks and a few other niche players but over the last couple of weeks, we’ve started now to see lenders coming on to the scheme, having applied for and being accredited by the British Business Bank.
The panel, as I record this, now stands at 27 lenders and the recent additions include Triodos bank, Atom bank and Synergy bank, so we’re starting to see some activity coming through.
However, one thing to bear in mind is that the appetite to support is going to be quite varied. The high street banks, well they’re probably going to be quite tough. The other ones are focusing on particular products, but also some of them are being very careful by saying it’s open for only existing customers.
Some of them are saying you have to provide security, which is a bit strange considering the government’s giving an 80% guarantee; a bit bizarre.
So you can see the panel is quite tight and there’s going to be reasons for you to really look closely at each of them to see whether it fits your needs.
If you want to know which lenders are on the panel, just go along to the British Business Bank website, which is www.british-business-bank.co.uk.
Alternatively, of course continue watching this Bulletin and periodically I’ll be telling you about all the new lenders who are coming on the Scheme.
Start Up Loans for Young Entrepreneurs
In the pandemic, one sector of society that has been hit particularly badly are the millennials. These are the 18 to 24 year olds who’ve been hit hardest when it comes to unemployment with them taking the brunt of job losses.
Well, the Start Up Loan Companies, is launching a campaign to encourage these 18 to 24 year olds to not necessarily think about getting a job, but perhaps to think about starting a business.
If you are starting a business, of course, some startup capital will always help and that’s where the Start Up Loan Company comes in.
Since it’s been going since 2012, of the 80,000 successful loan applicants they had, 54% of them have been unemployed and of all of that 54%, 31% of them were 18 to 24 year olds.
Now, interestingly, over the last year, the number of people applying for this in the 18 to 24 year old range range has doubled compared to 2019. So we can see there’s a lot of interest from young people in terms of starting a business. And this is what the startup loan company is hoping to tap into.
If you are in that age bracket and you’re looking to start a business, check out startup loans, it’s a great product.
If there’s four of you, each of you can have a maximum of £25,000, or if you’re on your own, it’s a maximum of £25,000. The interest rate is 6% and you can pay the loan back over five years. Great interest rates and a great loan term.
If you want to know more, just go along to their website, which is www.startuploans.co.uk
Back on the Growth Path
According to the latest Lloyd’s bank UK Recovery Tracker, all the key sectors in the UK economy are starting to look at growth again.
Their latest report for April highlights that of the 14 sectors they regularly monitor, all 14 of them reported positive growth output in the month of April. Now that is the first time since August, 2018, that all 14 sectors have recorded growth. In March it was 11 sectors recording growth. So you can see there’s now been a further increase, which is great news for the economy.
Which sectors are leading the pack? Well it’s manufacturing and also technology. Those are the ones that grew by the largest amount.
However, what is even more encouraging that 13 of the 14 sectors though have reported growth plans over the next 12 months, which is going to exceed that recorded by their global counterparts. So it does appear that UK entrepreneurs and business owners are feeling a lot more optimistic and a lot more bullish than their overseas competitors.
Overall really good news for the UK economy, which means that hopefully we’ll finish 2021 with some very strong figures.
Well, that’s it for another Bulletin and as ever, I hope you enjoyed watching it, and if you did please don’t forget to subscribe to this channel or hit the like and share button.
I look forward to being with you again, next time.
Are you soon facing your first Bounce Back Loan repayment? Many businesses have just paid their first repayment or soon will and are concerned with cashflow still tight. Opening our latest Bulletin, we look at repayment options under the Pay as You Grow Scheme designed to ease your cashflow burden.
A government Bill has been proposed to close a loophole in the insolvency process where Directors can dissolve their company with the aim of walking away from their Bounce Back and CBILS loan liabilities. The Bill, if passed, could see Directors facing sanctions if found guilty of fraudulently dissolving businesses.
To close, a new report highlights that after losing a share of the business lending market, High St banks are again becoming dominant lenders over the alternative lenders and Challenger banks. Is that a good thing?
Here also is the transcript of this latest Bulletin…
Bounce Back Loan repayment options; focus on directors who dissolve companies to avoid repaying government loan schemes; and return of the dominance of big banks in lending.
All of this in the latest Business Finance Bulletin.
Bounce Back Loan Repayments: Pay As You Grow
Are you one of the 1.5 million business owners that took out a Bounce Back Loan and you took it fairly early on? Well, by now, you will have had a letter from the bank advising that your payments have already started or will shortly be due. Many business owners are beginning to realise about the extent of the liability they took on. We’re certainly having more conversations with business owners who were not realising they’ve got to start paying this debt back.
A recent survey from Lloyds Bank highlighted that 29% of business owners didn’t realise that the government has now launched a new scheme called Pay As You Grow. Under this scheme, you’ve got a couple of options in order to lessen the pain of this first repayment. Obviously you’ve had this money now in your bank account for 12 months, and you’ve got a shock when this first repayment is coming due.
So what are you options? The government’s given you three things you can do. First of all, you can extend the term of the loan from 6 years up to 10 years. You can either take an interest only period for six months, or you can take a complete repayment extension for six months. So this is going to give you some breathing space.
Many people say this is not going to affect your credit record. Well, it’s kind of true in that it won’t go formerly on any of the credit reference agencies, so your record is clear from that point of view. However, do bear in mind, if you are taking one of these extension options, from the bank’s point of view in its internal records, you are flagging yourself up as a business that technically is still in distress. You’ve held your hand up and say, I can’t meet the payment and I need interest only; I need a complete holiday for six months or extend my loan for 10 years.
You are really sending a signal to that lender that all is not well.
Similarly, when you go to apply for finance with an external lender or third party lender, they will also be asking the question, when is your Bounce Back Loan repayment due? And again, if they’ve seen that you’ve taken advantage of this Pay As You Grow scheme, they will also take a step back and say, “Hey, you’re saying that you’re still in trouble.”
So whilst these schemes are great, just bear in mind, the potential impact or the unintended consequence asking for this forbearance can have. Of course, as always, if you are in trouble, make sure that you seek professional advice from your accountant or perhaps an insolvency practitioner, if your business is in that much of a kind of financial distress.
Whilst the scheme is great, just bear in mind, the unintended consequences that could happen if you request one of these forbearances.
Changes to Company Dissolution Rules
As I mentioned in the first section, the Bounce Back and CBILS loan repayments are now starting to be debited to business bank accounts, and the realization, as I said previously, it’s beginning to dawn on business owners, the liability that they’ve taken on and in many cases cashflow may still be a bit tight.
Regretfully, there may be some business directors out there who may think that I know what I’ll do, I’ll just dissolve my company and because I have no personal guarantees on the Bounce Back loan, or my CBILs (if you’ve taken it up to £250,000) why don’t I dissolve my company? That’s it job done. I walk away.
Well, the government is obviously wise to this because they’ve tabled a bill in parliament called the Ratings, (Coronavirus) and Director Disqualification (Dissolved Companies) Bill. Why don’t they come up with more snappy names?
This bill is designed to give the Insolvency Service the ability to investigate Company Directors, where they believe the company has been deliberately dissolved in order to avoid paying back any of the government loan support schemes. If you are found guilty of doing this, you could face a ban from being a Company Directory for up to 15 years. It’s designed to stop directors closing one company down and immediately starting a similar company under a different name the very next day.
If you are thinking of trying to walk away from this liability by dissolving a company, watch out, this really could come back and bite you.
As I mentioned, the previous segment, if you do want to take some advice, make sure in this situation, you go and seek advice from an insolvency practitioner. These are the ones who can guide you through this process. Don’t try to be clever because it really will trip with you.
Dominance of Bank Lending
In 2010, When I established business loan services, we were very much in the middle of the credit crunch. From 2008, 2009 the main high street banks effectively withdrew from supporting small businesses with finance. That of course left the door wide open for the rise of the new alternative lenders. And these guys have really been championing the cause for small business finance, taking a large share of the market.
When 2020 arrived, the Coronavirus really is up ended this kind of evening out of competition issues where the banks had the dominance in the marketplace.
A new reports has come out by Social Market Foundation and Metro bank. They’ve worked out that pre-pandemic, the alternative finance providers had 48% of gross new lending to businesses. Post Corona virus, that’s now fallen to 31%. So we can see that the big banks are starting to come back into play.
However, it’s more by default than design because with the Bounce Backs and CBILs loans, very many of them have come from the high street banks. But the danger here of course, is as demand for finance remains quite muted, some businesses are sitting on a lot of cash and still have money left over from the Bounce Back Loans and CBILs. It means that some of these smaller alternative finance providers may struggle to make inroads into the marketplace if demand for finance remains muted.
The danger of course, is that some of these alternative finance providers may close their doors and that will be a shame because the high street banks naturally just do not have the appetite to support small businesses.
Let’s see what happens over the next 12 months or so and let’s hope that the marketplace still remains competitive when it comes to access to funds.
That’s it if for another Bulletin. I hope you enjoyed watching and if you did, don’t forget to give it a like, a share and of course, subscribe to this channel.
That’s it for another week. I look forward to being with you next time. In the meantime, have a great and successful week.
Rob delivered a series of 3 workshops aimed at understanding how finance houses look at finance propositions with the aim for us as a team to deliver more of a bespoke offering to our customer base. The training was delivered to a mixture of staff who work with new businesses start-ups and existing established businesses across Mid & South West Wales. Rob delivered the training with an abundance of passion and has really helped my team look at financial propositions in a different light, many thanks again Rob and I look forward to work with you in the near future.
Shayne Yates | Welsh Government Regional Centre Service Mid Wales
Further to your recent presentation at LEAD Wales just wanted to say it was very refreshing to see somebody talk passionately and positively about finance, very insightful!
Kay Hyde | Hyde & Hyde Architects
Rob kindly agreed to attend the recent Pontypridd RFC sponsors networking evening and delivered what can only be described as an excellent talk on 5 Tactics to Boost Your Business and Your Profits. He kept the audience engaged throughout and the feedback from everyone was excellent. Rob is very knowledgeable on business and finance and on top of that is a genuine nice guy. We hope to have him back at a future event and I have no hesitation in recommending Rob’s services.
Angela Holloman-Coombes | Connective HR
I wanted to thank you for such an insightful, energetic, and entertaining talk at the Kevin Green Wealth event on securing funding and creating a successful plan. It was brilliantly executed and a pleasure to listen to and the ideas I’ve learned are definitely going to help me in going forward.
Max Cooper of Manchester
Hi Rob, it was so interesting and entertaining listening to you at the Kevin Green Wealth Coach Workshop in Reading this weekend! I didnt realise you can find Finance proposals such fun!. Brilliant tips! Thanks.