Posts

What is Fusion Retailing and Should You Try it?

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Transforming a business into a one-stop provider makes good business sense. Modern consumer behaviour and expectation of instant gratification means consumers demand convenience in everything they do.

With the rise and adaption of mobile communication and browsing technology, consumer habits have also changed. Increasing numbers of people ‘shop on the go’ – they don’t want to go to different stores and shops to get what they need if they can see what is available on a little screen.

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How Will Brexit Affect UK Trade Deals?

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Brexit has been the hot topics in the UK for over two years. UK businesses have already made preparations for potential lower rates of trade due to leaving the European Union.

But will all go downhill from here? Trade deals are integral in sustaining industries from raw material manufacturers to suppliers, but how will Brexit dictate the economic balance of the UK-EU partnership?

Currency at stake?

The pound was overvalued before the Brexit vote, which is why so many speculators and those in the know made a fortune betting against the pound.

Typically, the value of a currency is in part affected by the consensus of its economic current and future standing. Some experts had, before the leave vote, analysed the post-Brexit landscape and subsequently made the prediction that it will preempt a ‘slowing down’ of the economy.

However, these are probably the same ‘experts’ who predicted half a million job losses, an emergency budget and an extra £3,500 a year cost to every household in the UK should we vote to leave the EU.

Customs and trade?

Once the UK leaves the EU, it has to leave the customs union and take back control of the national economy once and for all. In practice, this could mean little difference to how things operate now. German carmakers, French wine producers and service companies which own significant stakes in our infrastructure will not stop trading with us overnight. It is not in their interests to block trade, neither is it our interest to reciprocate.

Countries such as Canada, the United States – in fact, any country which is not in or going to apply for membership of the EU trades freely with the EU. Why should the case be any different for the UK post-Brexit leave date?

What does the future hold in store?

Although Brexit will mean the UK is formally leaving the EU, under article 50 of the Lisbon treaty, the UK is still allowed to renegotiate a new trade relationship with the EU within a minimum of two years.

It is in the interests of the governments of the countries of the EU that a new trade deal is developed. However, the current mindset of some business owners, trade associations and, sadly, many of our elected representatives and unelected peers is one of defeatism and failure.

To sum it up, the future of trade between the UK and the rest of Europe will carry on with little effect. If there is any slight downside, that will be more than compensated by our new freedom to trade freely with other nations without the shackles of a protectionist treaty holding us back.

Business opportunities will be thriving in specific areas after Brexit has happened. We will undoubtedly be pleased to speak with you regarding any commercial finance enquiry. So contact us today with your requirement.

How to Invest in Companies

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Investing in companies can be both highly rewarding and challenging. Successful investing isn’t easy, but if you follow a few fundamental principles, you’ll give yourself the best chance of success.

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Best Areas in The UK for Property Investment

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With several proposals in the London Plan to be unveiled later in November of this year, the tides of the property investment market remain unclear. The government’s commitment to reducing carbon emissions is seemingly leading to increased landowner contributions to the local government, making businesspeople think twice about purchasing property investments within the London area. With London multiplying concerning house prices and developments, what other areas of the UK are prime for opportunity?

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A Guide to Commercial Alternative Finance

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Born in the United States of America, the alternative finance revolution has landed on our shores in the last couple of years and raising finance for the SME will never quite be the same again.  It is forecast that by the end of 2015, the altfi market place will have issued new loans of well in excess of £4 billion.

Gone are the days of going cap in hand to the business banker clutching armfuls of finger in the air financial projections produced, at cost, by your accountant.  Gone also are the days of waiting interminable amounts of time jumping through endless banking hoops whilst our “local” banker presents funding cases to far flung decision makers.  Gone are the days of being forced to proffer more and more personal security to support the funding requests of a growing company.

With the SME denied the help of traditional banks, largely due to the outcome of the 2008 crash and the impact of the Basle Accords on bank liquidity ratios, but with demand for vital sources of working capital still there, the number of alternative finance providers ready to plug funding gaps has grown apace.

Businesses come in all shapes, sizes and hues and, as a consequence, every business has its own unique funding requirements.  Alternative finance providers have emerged to focus on specific segments within the SME funding mix.  This is great news for the SME exploring its funding options, but the myriad of potential solutions does create its own challenges and the plethora of new players delivering multiple options can make it somewhat overwhelming for the uninitiated to tread a well planned path through the maze of new finance providers.

In an unstable economic climate banks are less likely to lend – especially to risky business investments. In today’s unpredictable financial market, it is becoming more and more difficult to get approved for a bank loan, which is why the trend for alternative finance solutions keeps on growing. Without these alternative funding options, many businesses would have ceased trading or would-be successful property investors wouldn’t have been able to buy a second property. Read more →

What Criteria Do Lenders Look for in a Business?

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Are you a fledgling entrepreneur looking to launch your own business? Or perhaps you’ve already taken the plunge and now wish to expand your operations? Either way, it’s highly likely you’ll need an injection of cash to make that vital next step and loaning from a bank, building society or other money lender is the traditional route.

Whoever you turn to for a business loan is not going to look favourably on an investment that they can’t see a return on, so it’s your job to convince them that you have what it takes to succeed.

Criteria Lenders Look For in Your Business

In particular, here are a few criteria that lenders will be on the lookout for:

  • Have you drawn up a comprehensive business plan, complete with a summary of your operations and your projected earnings and outgoings for the next two to three years? Preparation is key.
  • Market awareness. Similarly, you’ll want to include a rundown of the size, demographic and growth opportunities of your target market, as well as the state of play regarding your competition. What sets your business apart? Sell yourself.
  • Remember to make clear what you need the loan for and how it will affect your business. Whether you want to take on more staff, move to a bigger office location or expand your customer portfolio overseas, it’s imperative to stress the value in this transaction – for both of you.
  • Credit rating. All the business acumen in the world won’t win a loan if you have a poor credit history – after all, the shiniest colander leaks just as much water as the shoddiest one. Sort out your finances before you lay out your aspirations before a lender.
  • Cash flow. Again, you’ll need to show that you’ve not only managed your debt repayments in the past, but that you’re well equipped to do so again. Accurate data on your revenue and outgoings (both current and projected) is vital to breeding confidence in your business.
  • If you already have substantial assets belonging to your business, a bank will be more inclined to look favourably on lending you money than otherwise. This can act as a guarantee that they can recoup their outlay in the worst-case scenario.

Tick all the boxes on this checklist and you stand an excellent chance of being approved for credit from any lender you approach. However, the economic slump of the last decade has meant that more and more people are turning to alternative finance solutions to obtain the funds they need to help their business realise its full potential.

With that in mind, just remember that there are plenty of other options out there if the traditional route doesn’t bear fruit. Asset finance, peer to peer and crowdfunding are all increasingly popular methods of alternative finance that may well be right for you… and the criteria listed above will be just as beneficial on those fronts, as well.

Is it Getting Easier to get a Loan?

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The UK economy is very volatile at the moment, which has a direct impact on the banking sector. With the instability surrounding Brexit, lenders are generally tightening their strings and restricted the amount of finance they’re willing to give to British businesses. Inflation has also been rising which is another concern, as higher household costs and business expenditure often leads to an increase in debt.

High street banks have been reducing eligibility for some time, especially to new businesses in desperate need of capital. This has led to a booming alternative finance market, offering what banks would deem ‘high risk loans’ to start-ups and businesses without years and years of accounts. So, is it getting easier to get a loan? The answer depends which lender you’re applying to.

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The Pros and Cons of Bank Loans & Alternative Finance

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Businesses are faced with a choice when it comes to funding; they can apply for a bank loan or look for less conventional forms of finance. With such a huge choice of business loans and the alternative finance sector booming, it can be difficult to know which path to take. So why are non-traditional finance solutions proving so popular? They are easier to access and often deliver faster payments than the banks. Yet both types of lending have advantages and disadvantages, so it’s important to understand the terms and with a greater supply of finance than ever before, choose what’s right for your business.

We’ve put together this useful short guide to the pros and cons of alternative finance options and traditional bank loans.

Alternative finance options

Because there are so many different types of alternative finance available, it is hard to group them all together and differentiate the pros and cons. However here are some general points to note:

  • Speed and efficiency – applying for an alternative finance loan is quick and efficient compared to the long process at high street banks. If time is not on your side, an alternative finance provider can help
  • Specialised providers – while national banks work with a wide variety of businesses, many alternative finance providers have specialisms. This means they will understand your business model and needs better than a general financial institution
  • Tailored options – banks offer standard loans and commercial mortgages, while the alternative finance sector provides a range of solutions for all types of SMEs. Find something ideal for your finance needs, from asset finance to a merchant cash advance. You may also be able to benefit from flexible repayment options.

The main downside to using this type of funding is the higher level of risk. Instead of borrowing from a large financial institution which is fully regulated and protected, you will be lending from individual investors or a group. Also, the risk is high on the side of the investors which means interest rates can be higher with some products.

Bank loan options

  • Safe and predictable – a bank is the first point of call for many people to apply for a loan. It’s a safe place and you know the financial institution is accountable and credible.
  • Fixed interest rates – banks have the power to offer slightly lower interest rates than other lenders for certain products, and fixed interest for the loan term. Some alternative finance providers will try and match the interest rates of the banks but it’s not always possible as it’s down to individual lenders.

While a bank loan seems like a great choice, the main con is that the majority of SMEs and start-ups will not be eligible to apply. There is a long application process with lengthy paperwork, and businesses usually have to be established and profitable with the support of historical accounts. To get a business bank loan you’ll probably also need strong credit and capital to secure the loan.

Want to find out more about your alternative finance options? Contact our commercial finance brokers today.

Why are non-Bank Loans Gaining Popularity?

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SMEs are likely to need financial support when starting up or in the first few years of trading – yet it’s at this crucial time when high street banks often reject their loan applications. Banks and financial institutions have tightened their lending in the uncertain economic climate, and because of the higher risk of lending to start-ups and SMEs it is often impossible to secure a business loan.

Some businesses are set back after being rejected from a bank, and give up on finding the funding they require. Nevertheless others keep trying, and many have found suitable financial solutions from the alternative finance market. Non-bank loans are gaining popularity firstly because SMEs are being pushed into this type of lending by the banks who refuse to lend to them. Secondly, alternative finance providers can provide a wider range of finance and sometimes match the interest rates of high street banks.

What are the reasons for SMEs being refused a bank loan?

In the Close Brothers report ‘Banking on Growth: Closing the SME Funding Gap’ which is based on a survey of 1,000 financial decision makers in UK SMEs, the main reasons these small enterprises were refused finance were:

  • Cash flow not strong enough
  • Banks not lending to SMEs at all at this time
  • Not enough capital
  • Business plan not strong enough

With many high street banks not even considering SMEs for loans, or having extremely strict criteria, it is easy to see why other forms of lending have grown in popularity.

Non-bank loans: challenging traditional lending

Thankfully for start-ups and SMEs, new products have become available on the alternative finance market. Peer to peer lending, crowdfunding and asset finance allow small businesses to access vital capital in order to grow and succeed. These “non-bank loans” and unconventional forms of finance are acting as a lifeline to British start-ups which wouldn’t be able to trade without a significant cash injection.

But it’s not just snubbed SMEs who are turning to alternative finance – the market is thriving and supporting a range of businesses, investors and individuals. In 2015, it grew 84% according to Nesta, to £3.2 billion. Many alternative finance providers offer a multitude of advantages to small businesses in addition to being more accessible. The SME-friendly loans are forms of fast cash – sometimes applications can be approved and the money transferred the same day. Some forms of finance can also offer lower interest rates and more flexible repayment terms because you’re not tied to a bank.

Want to find out more about non-bank loans? Speak to our experts at Genie Lending today.

How to Finance a Start-up Business

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Starting a business in the current economic climate, with Brexit looming, is a challenge – some would say an impossible way. But innovation stops for nobody, so entrepreneurs planning to launch a business only have one thing in their way – financial limitations. Funding a start-up business is extremely difficult because there is no way to prove if a business will be profitable or not. Lending to a start-up is tremendously risky, and many banks and financial institutions are not willing to take that risk.

So without the help of a bank loan, how can a start-up get off the ground? Start-up finance is a niche and can be a difficult uphill struggle, but there are a range of investment options to explore as a new business. Securing the funding is a vital step to launching your business idea – here are some ways to finance a start-up business. Read more →