AUTHOR: Ian Hawkins
Now may not be the best time to invest in your business – but with competitors raising their game, do you have a choice? Swoop has solutions for you.
With Christmas on the horizon, the shops are looking to ensure they are stocked and prepared for the busiest season of the year.
Unfortunately, if your client has left it until now to go get started, you’ll find the prices have gone up.
Perhaps worse, if they have ordered from overseas, they may find those invoices in euro and dollars are getting more expensive to pay the longer they sit on them.
Whether they are stuck in the shelves or thinking of a refit of their premises, businesses everywhere are experiencing a crunch point.
Rys Cunnah, Head of Unsecured and Asset Finance says:
“Businesses everywhere are having to make cuts and find efficiencies where they can, but the big mistake is to cut something that customers appreciate. If they value your shop because it has a good choice of fashions, it’s a mistake to reduce the choice. If they like the decor of your trendy bar, it’s fatal to look passé.”
In times of tightening purse strings, Rhys says that the businesses which do well are those which have a plan to compete against their rivals in the areas that will hurt them most – and this often means finding funding to cover the costs.
“Naturally many businesses will be wary of getting into debt to cover spending in the run up to Christmas,” says Rhys. “Nobody wants to be saddled with recurring monthly bills when the rush dies down in January. But there are options for borrowers that may be more attractive and things that every business owner should think about if they need the money.”
Are rising interest rates putting you off?
The interest rates are shooting up, but business loans are typically much higher than these rates. Rhys explains:
“Personal loans are more competitive, but business loans are always many points above the base rate. True, some banks are pulling back on lending because they lose margin when they keep the cost of borrowing steady while the base rate is going up: but they have other ways of generating income.”
The answer for those seeking an unsecured loan is to look elsewhere in the market:
“Some lenders frankly need your business more than the banks do. They are likely to offer you a more competitive rate on better terms.”
Do you worry about repayments?
Those monthly repayments could become a real problem in the leaner months at the beginning of the year. If your client has uneven cashflow through the year, they may be hesitant about getting an unsecured loan. Rhys says that there is a solution to this issue:
“A Merchant Cash Advance (MCA) is a fairly new product that customers pay back as a fixed percentage of their receipts. The great advantage of this approach is that as the borrower, you know how much it will cost and you’ll only pay it back as you can afford it.”
Find out more about MCA here.
Is the new equipment that you want just too expensive to buy outright?
You can borrow more than money. Asset finance is a great option for businesses looking to purchase a major piece of equipment, undertake a refurb, or restructure to remote work by giving everyone a laptop. Rhys says that it is often overlooked as a funding solution:
“Asset finance is more flexible than traditional borrowing, and can be a faster route to business owners being able to get hold of what they need to give their businesses a competitive edge. There are also tax perks to asset finance which brings down the overall cost and make it even more attractive.”
Swoop will help you do the sums to figure out whether asset finance is the right solution for your clients’ needs. Click here for details.
New year – and beyond!
“Christmas will be over before you know it,” says Rhys. “As we look into the new year, we all need to remember that SMEs are the most agile part of the expoconomy. Change means opportunities, even if those opportunities look different from what we are used to seeing. The main thing is to know where you will find the funding if you need it. If you don’t need it now, make sure you know where to look for the day when you do.”