Whether due to slow-paying customers, inadequate cash reserves, too much debt, or other factors, cash flow problems are a common frustration for organisations of every size. Cash flow issues can stop you from paying suppliers, bills, or even employees, hinder your growth or, in extreme circumstances, lead to closure.
What many organisations do not realise, however, is that it doesn't have to be this way.
Bluestone can arrange bespoke cashflow finance for your organisation that keeps you running like clockwork and realising your ambitions.
A cash flow loan is a short-term commercial loan that can bridge the monetary gap left by late payments and other unforeseen circumstances. In simple terms, you borrow the money you need, and pay it back in fixed instalments over a short period of time. It can provide much-needed financial breathing space during leaner months and/or enable you to invest in key areas of growth.
Invoice finance is a collective term for the various types of invoice based lending such as invoice discounting, selective invoice discounting, invoice factoring and spot factoring. When you raise a customer invoice, you also send the invoice to a lender who advances you up to 95% of the value of the invoice straight away. This means you get paid faster, boosting your cash flow and enabling you to focus on growth. When the customer has paid their invoice, you repay the lender plus interest and/or a processing fee to pay the lender for their service.
Paying self-assessment, VAT and corporation tax bills is a legal obligation, but cashflow issues are a common side effect. By taking out a loan to ensure HMRC are paid in full and on time and then repaying the loan in instalments over time, organisations can retain valuable cash, avoid late payment penalties, and establish a healthier cashflow.
Professional indemnity (PI) insurance is key for those who offer a professional service, give advice or handle another organisation's data or intellectual property. The insurance covers you if your client suffers a financial loss due to work you have carried out for them. Paying PI insurance can be one of the largest costs that organisations have to meet, but many do not realise that they can spread the cost over time with PI insurance loan.
The types of asset financing options recommended for local authorities will depend on their specific needs and goals. Generally, equipment leasing and loans, financing, and real estate financing can be good options for local authorities.
An operating lease is a type of lease agreement where the lessor provides the use of an asset to the lessee for a specified period, but the lessee does not own the asset. It is different from a capital lease, which is more like a loan where the lessee takes ownership of the asset after the lease period. In an operating lease, the lessor retains ownership of the asset and is responsible for maintenance and upkeep.
An operating lease can benefit your organisation by allowing you to acquire the use of an asset without the financial burden of ownership. You only pay for the use of the asset during the lease period, which helps to conserve your organisation's capital for other investments. Additionally, you can take advantage of tax benefits and have the flexibility to upgrade or change assets at the end of the lease period.
Assets that are typically eligible for financing through an operating lease include equipment, vehicles, and other tangible assets. Approval requirements vary depending on the asset and your organisations financial profile, but typically include credit checks and a demonstration of the ability to make regular lease payments.
The typical repayment period for an operating lease is anywhere from two to seven years, depending on the type of asset and the terms of the lease agreement. The impact on your cash flow will depend on the amount of the lease payments, which are typically lower than if you were to purchase the asset outright.
A Hire Purchase agreement is a type of financing that allows an organisation to acquire an asset by making regular payments over a specified period of time, with the option to purchase the asset at the end of the agreement. Unlike a loan, the organisation does not own the asset until the final payment is made.
An finance lease is a type of leasing arrangement in which the lessor (the finance company) purchases the asset and then leases it to the lessee (the organisation) for an agreed-upon period of time. At the end of the lease term, the organisation may have the option to purchase the asset for a pre-determined amount or return it to the finance company. A finance lease differs from other financing options in that it provides organisations with the use of the asset without the responsibility of owning it outright.
The types of assets that can be leased through a finance lease vary, but they typically include equipment, vehicles, and other capital assets that a business needs to operate. The process for acquiring a lease typically involves filling out an application, providing financial information, and submitting a credit check.
The eligibility requirements for finance leases vary depending on the finance company, but they may include minimum credit scores, revenue thresholds, and other financial criteria.
The typical repayment terms for finance leases vary depending on the finance company, the asset being leased, and the terms of the lease agreement. Repayment terms may range from several months to several years. Compared to other financing options, finance leases typically have lower monthly payments and may provide more flexible repayment terms.