Small businesses have always been incredibly important to the economy. They stimulate business, and finance, with supply and demand. Despite this, small businesses as we know are finding it increasingly difficult to find lending solutions in the current situation.
Project Merlin was set up by the government to encourage banks to lend to small businesses. The project was mean to lend up to $76 Bn up to the month of March in 2012, but critics suggest that the lending still hasn’t been so freely. Companies wanting to grow are not able to due to this lack of feeling.
Chief Executive Nick Wall, of a Birmingham based company that provides to department stores had this to say “We knew we had a good product, but when we approached our banks they didn’t want to know,” he recalls. “They said it was a high risk area and they couldn’t help us.” All that changed with an appearance on BBC Breakfast television, however. “We’ve been inundated with offers of finance,” Mr Wall says. “Everything from
small investors looking to invest a couple of thousand with us to bigger players in the export market who want to get involved. “Our banks have even been in touch to say they should revisit our initial application.” It’s funny how a little bit of publicity can lift someones profiles and open the flood gates. There are however alternative solutions which not many small companies know about which include, Retail Bonds, Personal Asset Lending, and Invoice Financing.
Invoice financing is a growing solution and you will find most banks will offer this finance option, there are also specialist invoice financiers who will also lend you up to 80% of the money tied up in invoices then the rest when the invoices are paid. Using Invoice financing will only cost you a small amount, compared to the interest you could pay on a loan.