Many small businesses are feeling more and more under pressure to find finance, especially with the backdrop of economic doom and gloom. However, new figures have shown that in fact the overall cost of lending is lower than before – it just remains that businesses need to find funding to take advantage of.
The Department of Business, Innovation and Skills (BIS) shows that the overall cost of financing is in fact cheaper than before thanks to a decline in the Bank of England rate. Average variable lending interest rates were 5.39% in November 2008 whereas by 2011 they were just 3.5%.
Coupling this with government schemes that have been designed to improve the access to finance for small businesses suggests that there are actually opportunities out there for small businesses to find funding. Asset prices have stabilised and the real cost of lending has never been lower. However, it still remains that many businesses are turned down when applying for bank finance – so what other options are out there?
Invoice finance is one such option. Businesses can unlock the cash tied up in unpaid invoices, helping to ease cash flow issues caused by late payment. This is a flexible, affordable and accessible way to access a cash flow injection for your business. Rather than wait for months for customers to pay, you can unlock up to 90% of the value of the invoice within 24 hours.
This is one of the alternative finance options available for small businesses. With bank loans often not always available for start ups and SMEs alike, it’s worth knowing the other options that are out there for your small business.