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Most SMEs reach a point where they could do with some extra funds, whether it’s at the outset to kick-start a new venture, to help with growth and expansion, to diversify and explore new opportunities, or to navigate through lean periods when the going gets tough.
Asset finance is widely considered a sensible solution for funding the purchase of new vehicles or equipment. A typical Hire Purchase plan provides immediate use of new equipment whilst spreading payment over a number of months. Similarly, Finance Lease plans offer a rental solution for new equipment, whereby the equipment remains the property of the lessor and is rented over an agreed period of time.
Recently, Ignition helped with the purchase of a vacuum excavator worth £500,000, for Underground Solutions Limited – a utilities Contractor based near Hayle, run by Jamie and Sam Warmisham. Sam comments: “As the business has grown, we’ve needed to invest in more equipment and vehicles, and can always rely on Ignition to provide us with a good deal and great service.” The excavator is already proving a sound investment.
However, there are a number of other financial solutions available to SMEs wanting to boost funds or reorganise their finances. Refinancing is a means of selling existing valuable equipment and buying it back over an agreed period to meet your budget, whilst retaining use of it throughout. It can be great for unlocking capital to help fund other business needs.
Invoice Financing releases critical working capital tied up in outstanding invoices, helping to improve cash flow. With customers taking longer to pay their invoices it is common for SMEs to be hampered while they wait for payment. Invoice Financing can release up to 90% of the value of invoices.
Many SMEs also find it helpful to take out Corporation Tax Loans, to take the sting out of that dreaded annual tax bill. These loans spread the cost of tax bills into more affordable monthly payments, helping businesses avoid nasty surprises.
Finally, Commercial Loans are also available for a variety of business needs that may be less tangible than specific assets or equipment, such as launching a marketing campaign, recruiting additional staff, refurbishing premises, or even providing funding support during grant applications.
For example, Sellectronics, based in Falmouth, provides technology and electronic manufacturing services, including rapid prototyping and electronics design. When buying a new piece of equipment, the company can be eligible for EU match-funding grants of up to 40%, but has to make the initial outlay before funds are awarded, which can take three months. Ignition has helped Sellectronics by providing bridging loans for these periods so that the process goes smoothly.
These are just a few examples of how we consider the unique circumstances of each business so that we can provide the most helpful solutions. Contact us to find out how we can help your business.
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01872 272900
Great article Paul – don’t forget to check out the new award for Business Finance at the Cornwall Business Awards (now open for entries!)
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