It was a good idea in its initial stages, but it seems that due to a shortfall by the Royal Bank Of Scotland’s, project Merlin is in the Mud.
Project Merlin was created by the government to encourage the top 5 UK banks to ease tensions and increase lending to those small and medium enterprises who were struggling with finances.
The good news is that targets were met under the project, the bad news is that due to the shortfall, companies missed out on 1 billion pounds, which is hell of a lot of money in a struggling sector.
How are companies managing to stay afloat?
From research conducted by financial companies, it seems that SMEs are using their own savings to fund business and also alternative streams of funding. Many businesses have applied for external funding which is up by 11% this year.
So, what are the funding solutions?
Invoice Discounting has seen a rise in popularity. This method of funding allows companies to use the invoices that need to be sent to clients to gain capital. This way, they have the money upfront, generally in 24 hours in a lump sum, then continue to chase their clients for payment, which could generally take up to 120 days.
In that respect, invoice discounting and factoring are incredible methods of funding, because you are only using the money that is actually owed to you, rather than drawing funding for other sources, such as banks, which is extra funding. The difference with these alternative streams of funding is that they are quick, they are simple and they cost-effective, compared to the interest you may pay on a bank loan or credit card. Factoring seems to be the way to go in terms of funding. If you were relying on project Merlin for funding, it might worth taking a look at alternative methods.