Need more working capital? The bank isn’t your only option

One of our clients recently needed an injection of working capital.

They already had an overdraft in place, but it wasn’t enough to meet their growing needs. And the amount required was far beyond what a traditional bank would typically be willing to lend.

How could they access the cash necessary to invest in their future?

For many businesses, this would be a serious stumbling block. Most turn to banks as their first – and often only – option when seeking a loan. But what if the bank isn’t able to help? What do you do next?

The truth is, there are far more financing options available than most people realise – some of them quite unconventional.

In this case, we worked with a specialist broker who focuses on finding outside-the-box funding solutions. They suggested using “reverse factoring” or “supplier-side financing.” This essentially means that the finance provider pays the business’s supplier invoices when they are due, giving the business an additional 60 days to settle the balance.

In other words, instead of having to pay invoices within the usual 30 days, the business now had 90 days – enabling them to build up cash reserves that could then be reinvested in their operations.

This was just one piece of a larger financial strategy (though I won’t go into all the details here). And over those 90 days, the client worked hard to grow their revenues, further strengthening their cash position.

For them, this was the ideal solution. While banks can be inflexible with their lending criteria, this approach allowed for a more tailored, creative solution that suited their unique needs.

But don’t assume that just because this was unconventional, it was an “easy” option.

First, it wasn’t cheap.

Second, it wasn’t easy to secure. Loans like these are inherently risky for the lender, so they required an extremely detailed plan outlining exactly how the funds would be used and repaid. And, of course, they demanded comprehensive, accurate financial data to ensure the business’s finances were solid and that their investment would be safe.

This is where we stepped in.

Most accountants can only help you secure traditional bank financing – even when it might not be the right fit for your business.

But at Insight Associates, we take a hands-on, proactive approach to managing your finances. We act as an extension of your team, working closely with you to find the best solutions and drawing on partnerships built up over decades to provide you with options you may never otherwise have known about.

And thanks to our meticulous financial management, we can provide any lender (including the bank) with the financial data they need to secure a loan. 

If you’d like to learn more about how Insight Associates can help you manage your finances, secure the funding you need to grow and ensure your business thrives, get in touch with us today.

Simply email garry@insightassociates.co.uk or call us on 01279 647 447 to arrange a no-obligation consultation with myself or with our specialists.

Warmly,

Garry

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In this blog archive our Managing Director, Garry Mumford simplifies all things financial and shares with us a lifetime of practical financial business advice.

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