The need to borrow is something that many corporations face. New businesses and entrepreneurs looking to fund their business aspirations have a range of finance options they can consider raising the necessary capital to move their business forward.
Understanding the finance options for small businesses, corporations and entrepreneurs can take time and effort.
Luckily, there are some high-finance brokers who work with various companies and lenders to negotiate competitive financing solutions for new corporations and business start-ups. But before you call one, why not let us highlight some of the ways businesses can borrow?
Working capital loans
If your business is in a tight spot and suffering from low cash flows or needs extra capital to scale, working capital loans give you the funds to pay for business operations. These loans are not intended to buy long-term assets or investment products.
Specialized working capital loans can fund growing the business by hiring new staff, renting a larger property or buying working stock to manage higher-than-anticipated demand. They can also help companies ride out seasonal dips and lower revenue periods that are non-critical to business security.
Invoice financing
Waiting for credit clients to settle invoices can cause fluctuations in cash flow. Invoice financing provides a facility for ongoing finance secured against your ongoing unpaid debtor book position.
Trade finance
Trade finance represents a more traditional loan type. Businesses can buy materials and products to sell for a profit. They enable the business to purchase stock and working materials, allowing them to manage working capital more effectively and relieve cash flow pressure. Trade finance borrowing can buy commodities and products needed to carry out the business. Banks can also issue letters of credit which guarantee that suppliers will receive funds for goods ordered to provide a more secure trading platform when negotiating trade deals.
Stock finance
Stock finance has many uses; however, lenders want to ensure that it is the most suitable lending type for your business, so it’s essential to present your case in the best light. Inventory finance is a specialist market that can be challenging to negotiate and an area where broker-supported applications can lead to more competitive agreements and broader loan markets. Essentially the lender becomes the owner of your stock, which you keep and sell and their behalf. Lending sums are only likely to be a portion of the stock value to protect lenders from depreciation and the risk that they will need to take over sales should your business default on repayments. Hence, it’s crucial to state your case correctly to achieve favorable results.
Business bridging loans
These corporate loans afford borrowers sums needed to make big-ticket purchases or investments when there is insufficient liquidity in the company finances. This type of loan is generally viewed as a short-term borrowing solution for a few months to around two years. The loan is then repaid through usual business activities, capital raised from another source or a refinancing arrangement at the end of the term. Seek the advice of a top finance broker of bridging loans in order to make sure you get the best option here.
If you need help identifying the best lending solutions for your business, the knowledge and experience of a specialist broker can be invaluable.