Which Commercial Finane News Archive

Business finance loans can be essential for many businesses, providing funding for to meet the demands of cashflow and investment. There a many business finance loan providers willing to provide a business finance loan, however, in the current economic climate it is becoming increasingly difficult to secure a business finance loan.

Business banks have taken a more prudent approach to their credit criteria, Banks have also been increasing capital reserves under Basel III and going forward some commentators have muted that there will be a contraction in money supply during 2012

The experiences and the needs of business owners has seen many look for business finance loans away from the traditional banks and brokers. A popular mechanism able to provide a business finance loan is the business owners’ pension fund. Many business owners have been utilising pension schemes to provide business finance loans, in some cases, negating the need for traditional business finance loans. These tailored schemes can provide more investment choice than just a business finance loan including:

• Commercial Property Purchase
• Intellectual Property Purchase
• Share Purchase

For a business owner’s pension scheme to interact with their business, it is important to obtain professional advice from a specialist. This will ensure that the pension is the right mechanism to provide a business finance loan, it will also ensure that a business finance loan is in the best interest of the pension fund.

For more information on traditional business finance loans, pension driven business funding and to speak with a specialist advisor, please contact us.

Company loans are an important mechanism for business owners to consolidate and invest. Whilst there are many company loan providers, many business owners rely upon their business bank to provide company loan facilities. The recession and the repercussions of the banking crisis have made it increasing challenging for many business owners to obtain a company loan and it does not appear that the situation will change for some time.

This has caused many business owners to look for alternative providers of company loans. Self investment is a mechanism many business owners are utilising to provide company loans, through the use of registered pension schemes. There are specialist pension schemes tailored for business owners, enabling them to make specific investment choices which can interact with their businesses, including a company loan.

Some of the investment choices are:

• Company Loan
• Commercial Property Purchase
• Intellectual Property Purchase
• Share Purchase

The ability of a pension scheme to provide a company loan will be dependent upon the specific business and its requirements. What a pension can offer is flexible investment choice, not just a company loan, without having to rely upon third party financiers.

For further information and advice on the provision of a company loan by a pension scheme, please contact us.

2011 has already proven a difficult year for many businesses requiring business loans. Banks and other lenders have tightened their credit criteria and enhanced the levels of security supporting business loan facilities. In the first quarter of 2011 we saw the results of Project Merlin fall short by £25m per day. This is the governments’ effort to make the banks provide business loans and business funding. Not surprisingly, the lack of funding availability for business loans is leaving many business owners in a difficult position.

To make a bad situation worse, business loan availability may still fall short of the necessary provisions to boost the economy throughout 2012 as well. It has been muted that money supply will shrink going into 2012, this will leave all borrowing facilities, including business loan facilities, short of what the economy will demand and potentially nowhere near the levels required for growth.

We all know business loans are not the only form of business funding, however, at a time when business overdrafts are being consolidated into business loans due to the risk strategies of the major banks and cash flow is needed to help companies fight the effects of inflation, business loans are becoming an ever more important mechanism in the financial structure of businesses.

There are alternatives to traditional bank and third party business loans, business loans which can in some instances provide financial independence from the banks and other third party lenders. For more information, please contact us.

Small businesses are finding it tough to raise the business loan finance they have been asking small business lenders to provide. The first quarter results of Project Merlin, the government’s agreement with the big banks to make £76bn available to small and medium businesses via traditional lending facilities, saw £16.8bn of a required £19bn made available. This shortfall of £25m per day is not due to a lack of demand for small business lenders to make business funding facilities available.

Small businesses with a need for business funding may find that there are alternatives to small business lenders such as pension driven business funding strategies, or, where traditional business loan facilities are the best fit, benefit from the expertise of one of our advisors.

For information regarding small business lenders, business loans and business loan alternatives, please contact us.

Securing adequate business finance is vital for many businesses to ensure long term growth and financial security. In the current economic climate, securing finance for a business can be a difficult and sometimes impossible task.

Business banking accounts are not offering business overdrafts as readily as company directors have in recent times been accustomed, where they are being made available, business overdrafts can require substantial security including general debentures and personal guarantees. This causes many company directors concern when planning short term cash flow and makes it more difficult to plan for the long term.

The availability of finance for business loan facilities has in the same way been affected, many company directors are finding that tighter credit scoring has implemented by providers, general debentures and personal guarantees are required as standard loan security and the interest charge associated with a business loan is far in excess of the historically low Bank of England base rate.

Whilst company directors may have the option of an invoice discounting facility to aid cash flow finance, the cost of this type of finance facility is often high and unattractive. The obvious alternative, the directors’ loan, is again precarious as form of business finance, as it risks tax paid money at a time of economic uncertainty.

For company directors with established pension funds, there is the potential to provide business loans that reflect the low base rate, to provide a business loan without personal guarantees, to mitigate corporation tax whilst maintaining cash flow and, if viable, remove third party lenders completely.

Pension driven business funding strategies make effective use of what could otherwise be deemed ‘locked away’ pension savings. An active management of retirement funds with the ability to interact with your business can add value to both the pension and the business.

For further information and advice on exactly how pension driven business funding can help your business, please contact us.

The election brought new promise for many small business owners, however, banks have given no indication that the availability of business loans will increase to small businesses and the new chancellor has indicated that credit restrictions may have to be implemented to tackle the Britain’s debt culture. On top of this, public sector cuts will have a big impact on the private sector.

If recovery is to take hold, it is small businesses that will kick start the economy, the availability of business loans is key to this process, providing the working capital which is so vital to small business for growth.

Where banks are making business loans available, business owners are finding the terms restrictive compared to their experiences of obtaining business loans in the era of free credit. It is the norm for the lenders to take a charge over company asset as security for a business loan, however, the norm is very quickly becoming personal guarantees and charges taken over domestic property in order to advance a business loan.

This makes the process of obtaining a business loan difficult for many owner directors, obtaining a business loan with personal assets at risk does not sit comfortably, especially when the success or failure of a business in uncertain time could potentially affect family assets.

Also affecting the availability of business loans is a company’s credit rating, hard to protect in a recession, it will determine the costs associated with a business loan and the amount forwarded as a business loan.

As owner directors seek to consolidate and survive in the current economic environment, business loans are becoming harder to obtain with the terms owner directors previously experienced being a thing of the past.

However, not all business loans are instigated by 3rd party lenders, it is possible to source a business loan without having to experience the current culture of the banks. More and more owner directors are successfully obtaining business loans via self investment in the form of pension assets, investing in their company rather than the markets and providing the working capital necessary to see their companies through these hard times.

For more information, please contact us.

HSBC have announced a 26% increase in half yearly UK profits of $2.1bn, yet the British Banking Association reports that all UK banks provision of business funding is falling.

Although the month on month figures for new small business loans increased by £75m between May and June, many small business owners report that their banks are converting their business overdraft facilities into business loans. The result is stagnation with no real increase in actual lending to small business and no new business funding being made available for working capital and cash flow purposes.

The worrying statistic for small business owners is that year on year the British Banking Association reports a decline in total business funding through business loans. In June 2008, average monthly business loan new lending was £991m to small business; in 2009 this fell to £833m. In June 2010 this figure stood at £564m, almost half the small business loan lending figure of 2008. Throughout this period successive Governments have made every effort to reassure small business owners that small business funding will be made available, the figures show that the reality has been very different.

Not only are small business owners finding it increasingly difficult to find business funding facilities, when they do, they find that the cost of borrowing has increased. Interest charged on business loan and business overdraft facilities have increased, despite the Bank of England base rate being at a historic low and likely to remain that way until at least 2013. Small business owners are also reporting that an all asset debenture is not sufficient as security for business funding facilities. Large personal guarantees and charges over residential property are being taken where possible.

The reduction in business loan availability and the increase in costs are to be expected during a time of austerity. Many commentators would argue that the banks were simply irresponsible in some of the business funding decisions made in the build up to the recession. The issue for small business owners is that business plans and financial projections are predicated on a business funding risk profile that no longer exists and banks have closed the door on many small businesses.

If small business owners want to achieve the required business funding to make it through the recession, they need to accept that banks are increasingly unlikely to lend and if they do the cost of business funding is rising. Those business owner holding out for the banks to return to their old ways will have a long wait, probably long enough to have a detrimental effect on their business and their personal wealth.

The alternative is to look away from the banks and traditional business funding mechanisms such as business loans and business overdrafts. Many small business owners find success in their industry through being ahead of the competition, achieving small business funding is currently the challenge facing small businesses aiming to make it through the recession and to gain a competitive advantage moving into a recovery phase.

Many small business owners are already taking advantage of the alternatives, for more information about these business funding options and advice on how to implement them, please contact us

The election brought new promise for many small business owners, however, banks have given no indication that the availability of business loans will increase to small businesses and the new chancellor has indicated that credit restrictions may have to be implemented to tackle the Britain’s debt culture. On top of this, public sector cuts will have a big impact on the private sector.

If recovery is to take hold, it is small businesses that will kick start the economy, the availability of business loans is key to this process, providing the working capital which is so vital to small business for growth.

Where banks are making business loans available, business owners are finding the terms restrictive compared to their experiences of obtaining business loans in the era of free credit. It is the norm for the lenders to take a charge over company asset as security for a business loan, however, the norm is very quickly becoming personal guarantees and charges taken over domestic property in order to advance a business loan.

This makes the process of obtaining a business loan difficult for many owner directors, obtaining a business loan with personal assets at risk does not sit comfortably, especially when the success or failure of a business in uncertain time could potentially affect family assets.

Also affecting the availability of business loans is a company’s credit rating, hard to protect in a recession, it will determine the costs associated with a business loan and the amount forwarded as a business loan.

As owner directors seek to consolidate and survive in the current economic environment, business loans are becoming harder to obtain with the terms owner directors previously experienced being a thing of the past.

However, not all business loans are instigated by 3^rd party lenders, it is possible to source a business loan without having to experience the current culture of the banks. More and more owner directors are successfully obtaining business loans via self investment in the form of pension assets, investing in their company rather than the markets and providing the working capital necessary to see their companies through these hard times.

For more information, please contact us.

Many people view their pension savings as a dormant fund, accumulating (or not) to be utilised for income at 65. For many entrepreneurs this method of saving for future income is viewed negatively as they feel funds could be better utilised invested in their business ventures.

In a climate where commercial loans are difficult to obtain on what entrepreneurs deem fair terms, many are looking for alternatives to the traditional commercial loan to provide working capital for their businesses.

One alternative with many advantages is the utilisation of pension funds. Legislation enables entrepreneurs to interact their pension funding with their business. What many are achieving is the ability to negate the need for a 3^rd party commercial loan by investing pension assets in their business in place of the traditional commercial loan.

A major benefit of this approach to business funding is independence from traditional 3^rd party commercial loan providers, the costs associated with a commercial loan and the security currently required to guarantee a commercial loan facility. Financial independence and knowledge of how much funding can be achieved provides certainty in uncertain times.

Over time, pension funds can become a very powerful and flexible business funding mechanism, in some circumstances, removing altogether the need for 3^rd party commercial loans. As the pension provides commercial loans to the entrepreneur, it benefits directly from the interest charged on the commercial loan facility, growing to provide enhanced lending potentially and the possibility of higher income in retirement.

Legislation dictates how the interaction of pension funding with an entrepreneurs business takes place and the value of pension funds will determine the amount of working capital that can be released.

For more information, please contact us.