As a follow up to last weeks post – I thought due to the response I had and the latest news I have been hearing from finance companies, I ought to keep you up to date.
I’m sure you’re all aware that panic buying is effecting all of our supermarkets. Empty shelves are a common occurrence, demand is far exceeding supply. Well, it’s not unique to supermarkets. We have already been hearing from finance companies, there are certain industry sectors that they are not interested in helping, and other sectors are currently under review.
As one company director said to me last week
“Mark, I want you to source me a loan for £150k as soon as possible, over 5 years with no penalty for early repayment. My family and employees depend on the income we derive from our business, it pays the mortgage for all of us and I have no intention of running out of cash and having to close the business”.
The recurring theme was: “I better get finance now, whilst my business is still strong! It will be cheaper and easier to get.”
Let me ask you a question about your business given the current Coronavirus crisis.
Do you think your business cashflow position will be stronger or weaker in 1- 3 months time?
There’s a lot to take consideration.
- Potential staff issues.
- Client or customer demand.
- Being paid late by your clients.
When you apply for finance, underwriters look carefully at your latest bank statement. They compare it to the previous ones, to detect a trend of how the business is performing. Waiting until your cashflow declines could cost you double the interest rate, and possibly added security! Whereas a few weeks earlier it could have been much easier.
There answer to this issues is to make sure your business does not run out of money by increasing your financial reserves. We all know, that you should never ask for money when you really need it. The banks are unlikely to be there to help small and medium size businesses quickly.
You do not want to approach the finance companies when everyone else does, think toilet rolls in supermarkets! If all businesses rush to borrow money at the same time, it will be in short supply and costly.
The forward thinking company directors are getting their finance in place, before everyone else.
Please call me if you want to discuss your options on 0800 612 5364 or 07710 466166