Business Finance

 

The subject of business finance is often considered to be difficult but this is definitely not the case, just consider your finances for your personal expenditure and add a few more twists and turns to help you avoid tax pitfalls and thats all there is to it !

 

Ok so that was a simplistic way to start off with but it pretty much is not a difficult subject.

 

Starting out:

 

You may need a bank account to run a business but like all purchases you shop around to see the best on offer. You may be able to operate via your own personal account for a while but make sure you keep accurate details of what comes in and out for the business.

Will you need facilities to pay in large amounts of cash and also withdraw change for a normal retail business if not start looking at postal/internet banking such as Abbey. The main reason is it’s free! And you can’t beat a deal like that. Alliance & Leicester also operate a good system via the post office.

If you need to raise finance to start your business don’t rush to the bank, first set out your objectives, exactly what do you need to borrow and for how long and then start to think about a lender. If possible a relative or someone close who would be willing to back you but at a reasonable rate. (Don’t forget the banks are out to make money and that means on every type of transaction or service they provide) The early days are going to be difficult and over optimism on your turnover and profit will create problems and worries that won’t help you.  

 

Up and running.

 

OK your up and running and you need machinery, plant, vehicles or even premises to hold this business. These all cost fairly hefty sums of money, but what you should ask yourself, do I really want to own them. Might sound like a silly question but its really a case of plant machinery and vehicles more often than not loose money and wear out so you will at some point need to replace them. So the best way to have access to these items is to lease them, this is also the best way for tax reasons as the payments are tax deductible. At the end of the lease you can become the owner with a final payment or send them back and get new (the best way for vehicles).

 

Expanding.

 

Right your business is looking good and you want to expand which will possibly mean you need more stock, machinery, personnel or premises to handle the expansion.

Here you need some thought for options and I suggest a conversation with a commercial finance broker (yep like me!)

Stock and machinery can be done by lease etc, premises means your looking for a commercial mortgage and the money your paying on rent would reasonably pay for your mortgage and leave some change.

If you have a number of customers that are paying you on a monthly basis via invoice then we can use those invoices to raise cash fairly instantly. This is always a good way to finance expansion and can be switched on as required. (If you get the right company)

 

Should you have any questions, queries or requirements please feel free to contact us.