Finding the Best Business Finance Deal

In previous decades, traditional bank financing was the obvious route to follow for any business looking for an injection of funding. Now, however, with bank lending drying up and a proliferation of non-traditional forms of business finance available, it can be difficult to compare the various options and to find the best deal.

The essential foundation required to navigate through the various options is to know the needs of your business. Why are you looking for financing, how much do you need, and how will it be repaid? Any lender will want to see evidence that you have thought through your application, but even if they do not, you need to feel safe and secure in having chosen the correct option. Take the time to sit down and conduct a financial health check on your business before you start. Are you looking for finance simply to plug a short-term cashflow gap, or do you have more serious and long-term cashflow issues? If the latter, you need a plan to address them, or any finance deal will simply dig you into a deeper hole.

Once you have conducted a financial health-check, you will be in a position to understand the exact requirements of your business. The type of finance deal you require will vary, depending on your financial needs. If the business is in excellent financial health, then traditional bank lending may be open to you. If you are looking to solve a short-term cashflow issue, then some form of invoice financing may be appropriate, whilst if you need to purchase a significant asset, you may wish to investigate a hire-purchase agreement or similar form of asset finance.

Whichever form of financing fits the particular financial context of your business, it will almost certainly be worth obtaining some independent advice before committing to a particular provider. Ideally, you should consider spending some money on a financial professional. Whilst it may seem an unnecessary expense, finding someone who can analyse the small print of any agreement and easily understand the pros and cons of competing deals could save you significant amounts of money. At the very least, you should ask for advice from an objective and independent friend or business colleague before committing to a financing deal. In the best case scenario, you will have found the various deals you are considering by consulting business acquaintances and following up on their recommendations.

Clearly, the main point of interest in most financing packages is the interest rate being offered. You should try to compare the rate of repayment amongst the various deals you are considering, not just each month but over the life of the package. Crucially, however, you should also look at the ancillary conditions of the deals. Is early repayment possible? Are there service charges or penalty clauses in one deal and not in another? Make sure you write down the pros and cons of each deal and work out their financial consequences before making a final decision.

We can offer you financial solutions to help keep your cashflow healthy. Request a quote now to find out how much invoice finance can save you.

Back to top