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Rejected for credit because you haven’t been trading long enough?

Here at Bibby Financial Services (BFS), we conduct a number of studies each year to make sure we keep our fingers on the pulse of the UK businesses landscape. Our most recent study of 1,000 businesses found that nearly half (44 percent) of businesses rejected for finance were told they hadn’t been trading long enough.

Despite the upturn in the economy our research identified that nearly of half of SMEs are turning to self-funding – using their own savings or borrowing from friends or family – rather than turn to invoice financing solutions such as Bibby Financial Services’ own Forward Finance product which considers the strength of the sales ledger; taking into consideration the pipeline of a business – not just past performance or length of trading.

The dangers of self-funding

Business owners should understand the dangers of self-funding, recent press coverage of the survey highlighted the need for business owners to be aware of the pitfalls. Self-funding should be the last resort for entrepreneurs as tying personal and business finances together has inherent dangers.

Putting your own savings into your business or borrowing money from family and friends is often used to launch a business venture, but once the business is on a viable footing finance is available even if it’s not offered by high street banks.

The benefits of invoice financing

Invoice financing is an increasingly popular option for businesses who need help with cashflow. With the banks seemingly unwilling to help business owners, invoice financing is proving a useful aid for SMEs looking to release monies tied up in outstanding invoices.

There are two main types of invoice financing: factoring and invoice discounting. The advantages of both products is that they allow you to access money your business is owed quickly. Depending on which product you choose you may also receive assistance with credit control and sales ledger management.

What is Forward Finance?

One of our most popular invoice finance products is Forward Finance. Business owners across the UK are using this service successfully to give their business a cashflow boost and inject much needed funds for growth.

Forward Finance is for businesses with a turnover of up to £300,000, it’s simple to set up and has one transparent fee – typically 3.75 per cent of your turnover, providing you the flexibility to grow your business and take advantage of market opportunities.

Forward Finance is quick to set up, typically your business could have access to up to £50,000 just five days from application. It works on a flexible 28 day rolling contract that allows you to release value from invoices the same day they’re raised. There are no set-up charges and one simple to understand fee.

7,000 businesses can’t be wrong

Here on the Bibby Blog we’ll continue to do all we can promote invoice finance as the first choice for business owners looking to fund growth. With over 7,000 customers using our services successfully, we want to continue helping UK businesses realise their growth ambitions and prosper using invoice financing as part of their business armoury.

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