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UK Companies Having An Easier Time Finding Funding

by Jim ONeil on January 27, 2012

in business loans

When consumers in the UK are unable to secure loans bank provided, they turn to payday loans and other alternative sources of financing. But, what about businesses? Commercial lending restrictions are just as tight and many companies need financed capital to help them through these difficult economic times.

Payday loans are often not enough to keep a business afloat. Fortunately, small and medium sized businesses have other options designed especially for them.

Asset-based lending, invoice finance, business loans, and trade finance are several types of alternative funding for businesses. Some websites are popping up to help business owners find this financing. The service is free to both businesses and lenders, making the arrangement financially attractive for both parties.

Having access to free independent advice regarding commercial financing makes it easier for business owners to find the best loan.

RSM Tenon is one company that began offering this service in response to a need it identified. Company representative Carl Jackson noted that a traditional overdraft is usually not sufficient for a growing small company. The alternatives provide companies with higher funding levels, increased flexibility, and most importantly, a reduced level of personal risk.

Companies can explore their options and select a financing arrangement that is most suitable for their present needs.

Research reveals that almost 42,000 UK-based businesses utilize invoice financing. With this arrangement, the business owner gets fast, cheap loans based on outstanding invoices. Financing companies offer immediate funds against these invoices, eliminating the need for the business to wait 30 or more days to be paid through invoicing.

This type of funding is useful for both companies with cash flow problems and those that are growing quickly. In recent years, more businesses have used invoice finance.

Asset based lending is another type of funding that has recently increased in popularity. This involves a company borrowing against invoices and other business assets like machinery, property, structures, and stock. Mr. Jackson reported that the industry has changed its opinion of such funding models.

These were once considered only as a last resort. Now that it has become difficult to find commercial funding and business owners are starting to understand that this alternative financing features competitive terms and flexibility, more are turning to these products.

This type of financing cannot resolve every funding issue, but few solutions can in themselves. However, business owners should be aware of these options because these may be the loans cheapest to them. Knowing what all their alternatives are allows entrepreneurs to make the most informed decisions, whether they are trying to consolidate debt, improve cash flow, or grow the company.

In recent years, more people have been using no  credit check payday loans to meet their financial needs. When repaid according to terms, that financing can be very useful. Now, businesses have their own options for alternative funding. These are usually easier to get than loans bank offered and feature convenient repayment terms.

If the current financial climate continues, more business owners may begin taking advantage of asset-based lending, invoice finance, and similar financing options.

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