Month: June 2019

What is a bridging loan exit strategy?

28th June 2019 / / Comments Off on What is a bridging loan exit strategy?

When taking out a bridging loan you will be required to provide details of your exit strategy, the method by which you will pay back the loan.

Bridging loans are an extremely valuable form of short-term finance that can help businesses to quickly acquire money to cover an expense before credit becomes available to them.

Just some of the reasons that businesses use bridging loans include funding unexpected expenses, paying urgent debts, and investing in time-sensitive business opportunities.

Before rushing in and requesting a bridging loan though it’s very important that you create a plan for paying back the money. This is called your exit strategy.

The price of a poor exit strategy

When you take out a bridging loan you will agree a date by which the debt will be repaid. If you cannot repay the amount by this time you will need to consult with your loan provider about what happens next. 

In some instances, it may be possible to extend the loan, but beware that this is not always the case. A late repayment could end up costing you a considerable amount in renewal costs or late payment penalties, as well as having a negative effect on your credit rating, so it’s wise to ensure that you have a reliable exit strategy in place before going ahead.

Typical exit strategies

Your exit strategy will depend entirely on your business’ unique circumstances and the reason that you required the bridging loan.

A few examples of typical exit strategies include:

  • Selling a property or land
  • Selling debt to a collection agency
  • Selling shares or assets
  • Inheritance
  • Refinancing

For further information about bridging loans,or help and advice with creating a sound exit strategy, get in touch with our team of experts here at Richmond Asset Finance by calling us on 0113 288 3277.

How bridging loans can help businesses affected by seasonality

15th June 2019 / / Comments Off on How bridging loans can help businesses affected by seasonality

Commercial bridging loans provide businesses affected by seasonality with funds to bridge the gaps between seasonal peaks and troughs in revenue.

Seasonality is a challenge faced by businesses in a variety of industries whereby they experience recurring peaks and troughs in income throughout the year.

One of the commonest causes of seasonality is the weather. Many businesses thrive during the warmer summer months and then see a sharp decrease in revenue when the weather is wet and cold.

The weather is by no means the only cause of seasonal dips though. Other factors that could cause seasonal changes in revenue include the economy, university terms, and special celebrations like Christmas, Valentines’ Day, Easter, and Mothers’ Day.

Tackling seasonality

Businesses that are affected by seasonality should take the time to analyse their performance throughout the year and understand when and why these dips and troughs occur. Once they have a good understanding of what is happening and why, they can adjust their budget throughout the year accordingly and make plans to drive sales or push alternative sources of revenue during the dips. This could involve setting up a side-project, running special offers, boosting marketing efforts, and hiring seasonal staff.

Even businesses that have prepared and planned for seasonal dips may find themselves struggling with cash flow during these quieter periods though. This is when a bridging loan may come in handy.

Bridging loans to finance seasonality

Bridging loans offer businesses affected by seasonality a quick way of acquiring the funds they require to tide them over during a seasonal dip.

As well as being useful for keeping the business afloat and paying for unexpected expenses during quieter periods, bridging loans can also be useful for maximising profits during peak periods.

Businesses that experience significant increases in demand at certain times of the year will need to inject large amounts of money into buying stock and hiring staff before they enter their busy periods. A bridging loan allows them to acquire more inventory and cover greater expenses to further increase sales during these seasonal peaks.

At Richmond Asset Finance we provide flexible commercial bridging loansto help with your business’ immediate financial requirements during seasonal peaks and troughs. To find out more about our bridging loans, give our team of experts a call on 0113 288 3277.

Sources of finance for start-up businesses

6th June 2019 / / Comments Off on Sources of finance for start-up businesses

Finding the funds to get your start-up business off the ground and turning a profit can be challenging, here’s where to start.

Growing a new business can be difficult without a healthy cash flow. Purchasing business premises, investing in stock, hiring people, and marketing your new venture all costs money.

Finding the best finance solutions to meet your start-up’s specific requirements is key to setting up and growing a successful and profitable business.

Here are the five key sources of finance that every start-up business should consider.

Personal sources 

Personal sources of finance should be a given, these can include savings, personal credit cards, collateral from assets, and loans from friends and family members. Investing your own money gives others confidence in your new venture and your commitment to it.

Government grants

Acquiring a government grant can be a lengthy and laborious process, so whilst extremely valuable, a grant is unlikely to help in the short-term if you need money fast. Grants are usually awarded to businesses working towards a specific aim, and the criteria for eligibility can be very niche.  Business ideas in sectors that make a significant contribution to society are more likely to be eligible to a government grant, particularly environmental projects and businesses working in renewable energy, the local community and innovative science.

Banks

Banks can offer your start-up business a range of flexible finance solutions to suit your needs. Bank overdrafts can provide short-term finance, whilst a bank loan is designed as a longer-term borrowing solution.

Commercial finance broker

Professional commercial finance brokers like our team here at Richmond Asset Finance are experienced at helping start-ups to find the most suitable finance solutions. Financing options that can be particularly useful for start-ups include asset financeand bridging loans, both of which can help you to gain the assets you require to get your new venture up and running.

Investors

Angel investors are wealthy individuals who seek opportunities to invest in start-up companies. It can be very useful to have an angel onboard with your start-up business as they are often willing to contribute experience and contacts to your business in addition to cash. 

For more information about any of our commercial finance solutions, give our team of experts here at Richmond Asset Finance a call on 0113 288 3277.

Four times a bridging loan could help your business grow

6th June 2019 / / Comments Off on Four times a bridging loan could help your business grow

Bridging loans offer a quick and simple way of raising finance to take advantage of time critical business opportunities.

Whether you’re a new start-up or a well-established business, finding a large sum of money for a new investment at very short notice can be difficult and risky.

However, regularly allowing opportunities to pass you by can be just as damaging, making it difficult to keep up with competitors and preventing growth. 

This is where bridging loans can help.

A bridging loan is a short-term funding solution that bridges a gap between a debt becoming due and credit becoming available.

Here are four times when a bridging loan could help your business to grow.

New equipment or machinery– A bridging loan can be used to purchase new equipment or machinery to increase the efficiency, output, or cost-effectiveness of your business’ production process.

Investment opportunities– Profitable investment opportunities don’t come around every day, but when they do you want to be able to snap them up. From new business partnerships to new stock, investing in fresh opportunities is what keeps your business current, competitive and profitable. 

Buying property or land– Bridging loans are most commonly used for purchasing property or land and developing it. When buying property, time is of the essence, and applying for a mortgage can be a lengthy process. Bridging loans are ideal for raising funds very quickly to bridge the gap until the mortgage comes in.

Start-up costs – If you’ve identified an opportunity for a new business venture then you’ll want to act quickly to capitalise. A bridging loan can provide you with the funds you need to get your new business off the ground or market your idea.

For more information about commercial bridging loansor to discuss applying for one, get in touch with our team here at Richmond Asset Finance by giving us a call on 0113 288 3277.

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