Cashflow finance provides capital to a business to cover day-to-day operations, which is repaid over a fixed period. This type of financing can help companies with fluctuating or irregular cash flow to meet their funding needs, enable growth and improve their liquidity.
If you would like to discuss cashflow financing options for your business, get in touch for a no-obligation conversation with our expert team.
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There are several types of cashflow financing including:
From slow-paying customers, inadequate cash reserves, or high debt levels, to seasonal market fluctuations, cash flow problems are a common frustration for organisations of every size. Common, but a serious issue that should never be ignored.
To ensure you can pay your suppliers, utility bills, wages, and more, you need a healthy cashflow underpinning your organisation.
Bluestone can arrange bespoke cashflow finance for your organisation that keeps you running like clockwork and realising your ambitions.
Contact us today to discuss your cashflow strategy and the potential solutions we can provide.
Got a question? Get in touch with us and our team of dedicated account managers will be happy to help.
With invoice discounting, you maintain credit control which means you can manage your client relationships. This is a more time-consuming approach as you will need to chase payments yourself. Invoice discounting is generally available to more established businesses with higher turnover.
The benefits of Invoice Discounting are:
Maintaining positive cashflow in your business and utilising finance solutions to fund your assets will help support continued investment in other areas such as overheads, employment and further growth.
With an invoice factoring facility, the lender provides a ‘credit control’ functionality on your behalf, chasing late payments and performing credit checks on potential customers so you can concentrate on running your business. In this scenario, your customers will know you’re using a factoring provider. This option is often better suited to younger businesses or those with a smaller turnover.
Gemma is owed £10,000 by a previous client for a completed project, but the invoice has payment terms of 30 days. Gemma agrees to an invoice finance deal that will give her 85% of the invoice up-front, with total fees and charges at 3%.
When Gemma sends the invoice to the lender, she receives an advance of £8,500 within a couple of days. Then, when the customer pays the invoice, the full £10,000 goes into a bank account controlled by the lender.
Gemma gets the remaining value of the invoice (£1,500) minus the lender’s 3% fee (£300), so she receives £1,200.
One major risk is the inability to generate projected cash flow to repay the loan, leading to late payment fees or default. This can impact your ability to secure future credit for your business. In the case of default, lenders can take legal action to collect the debt.
To mitigate these risks, always be truthful with any information you provide and carefully evaluate cash flow projections ensuring you’re not over stretching the business.
If you do encounter unexpected difficulties, communicate with the lender early, being honest about your situation, and explore options for loan modifications or extensions – most funders are keen to work with businesses to help them through challenging periods.
Loan amounts can range from £25,000 to £500,000 with terms starting from 3 months and stretching to 60 months. Interest rates can range from 10-30% flat and are dependent on the strength of each individual business and the funder used.
The application process can take a few days to a week, depending on the lender and information required. It typically involves submitting documentation and completing an application form, all of which is collated and submitted by Bluestone on your behalf. Providers of a personal guarantee will need to complete a Net Worth Statement.
Cashflow loans traditionally are to support a business with it’s Operational costs in the short to medium term. That may be funding a recruitment drive, a marketing campaign for a product launch or just helping get through a challenging period. There are specific loan types for funding HMRC expenses such a VAT bills, Corporation Tax Bills or self-assessment. Capital Expenditure funding can normally be secured against the asset being invested in, (a vehicle, office furniture, solar panels or IT equipment for example), but where there is no physical asset, cashflow loans are the most appropriate product to use.
Each lender is different, but typically they require your latest set of filed accounts, up-to-date Management accounts including P&L and Balance Sheet, and the last 6 months bank statements. In most instances the funder will require some form of personal guarantee as security against the loan, (you can read more on personal guarantees on our blog here)
Businesses that have been trading for over 3 years, with positive accounts and affordability in their bank statements, will have a much higher acceptance rate.
A cashflow loan is a type of financing that helps businesses manage short-term cash needs based on projected cash flow. The business receives cash paid direct to them from the bank and it is not secured against business assets such as vehicles or computer equipment, or dependent upon invoices generated.
We know finance can be complex and often it's easier to talk things through. Drop us a message or give us a call 0330 135 8660 and we'll get back to you ASAP.
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