Financial Tips for Business
6th May 2022
There are some important updates for the Recovery Loan Scheme (RLS) which will impact applications.
The closure date is the 30th of June. However, unlike the CBILS, this is not the application deadline date. Instead, the application has to be credit approved by the 30th of June!
Depending on the lender, getting to a credit approval can take in excess of two weeks. The volume of applications has increased dramatically and the advice from Choice Business Loans is that you should not delay if this is a loan that you wish to apply for!
Two of their lenders this week reached their RLS funding limit and have therefore closed the door on new applications. They anticipate that more lenders will follow suit in the lead up to the deadline.
A quick reminder of why the RLS is a good option for businesses:
- No personal guarantees under £250k, and limited to 30% for loans up to £2mill.
- Maximum interest rate they are able to charge is 14.99%.
- Multiple uses of funds.
- Can be obtained in conjunction with a CBILS and BBL.
N.B. If the lender can offer better terms on their ‘business as usual’ product, then that has to be offered rather than the RLS .
If you would like to explore the option of a Recovery Loan for your business, please scontact www.choicebusinessloans.co.uk
For those companies who work with Not For Profit Organisations and Charities, it is useful for you to know there is a specific lender for the RLS for this sector and they have advised us of the following:
The Recovery Loan Fund offers eligible organisations loans of £100K-£1.5m, with a 1-6-year term and offers grants alongside loans for Black and Minoritised-Ethnicity led organisations in England. The Recovery Loan Fund for Charity and non for profits is open for applications until 11.59pm on Friday 20th May 2022.
20th April 2022
This is a timely reminder that the Recovery Loan Scheme (RLS) is finishing at the end of June. We are yet to hear of the replacement, but it is very clear that businesses heavily effected by COVID are needing RLS support moving forward as they get back on their feet.
Unfortunately, some people have been mis-informed about who can apply for the RLS, so this is a good opportunity to remind you of some key criteria. Full details can be found here.
The maximum RLS is determined by three main criteria:
- 25% turnover in 2019, minus any CBILS
- 2 x annual wage bill, minus any CBILS.
- 18 month liquidity need (CBILS not taken into account)
The BBL’s are not taken into consideration in any application, and it is at each lender’s discretion as to which of the above criteria they base their lending on.
A lender, or lenders, can provide up to £2 million as one or more of the following facilities:
- Term loan
- Invoice finance
- Asset finance
Our partners, Choice Business Loans, are FCA regulated, and this means that they can work with a broader selection of lenders. They also support sole traders and can arrange consumer asset finance.
They also have a lender who can provide consumer asset finance, funding assets such as boats, small planes, gliders, classic cars, horseboxes, motor homes and rally cars as an example.
This is a great opportunity for business owners work to support their lifestyle. Being able to make monthly payments for something can be easier than taking out Directors loans from the business.
Also, using asset finance to release the value of a personal asset so you can inject it back into the business can be a smart way of raising money for the business.
31st March 2022
To add to the turbulence of the business world we still need to keep an eye out for those people who aim to scam us out of our hard-earned money. The NACFB (National Association of Commercial Finance Brokers) have highlighted that scams on businesses are increasing and have issued some good advice to protect your business. The three main points are:
Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.
The UK’s Take Five campaign https://www.takefive-stopfraud.org.uk/ is a really useful resource to tap into for posters and training aids to keep your company scam free. It also has information to help the vulnerable, elderly or indeed anyone, to avoid scams.
15th March 2022
Cost Savings for Businesses
With the cost-of-living spiralling, now is a prudent time to consider what costs you can shave in your home and in your business. Here are just a few we thought were worth mentioning:
With mortgage rates still at an all-time low, it is worthwhile checking to see when your current fixed rate renewal is due. Some mortgage companies will allow you to change products up to 3 or even 4 months early without needing to pay any early redemption charges, so you could save money right away. With the Bank of England rising and with many in the mortgage market saying this will continue throughout 2022, maybe now is the time to act and to see if your can save money. We can put you in touch with an experienced mortgage advisor who can look to see if you are able to take advantage of these low interest rates or maybe assist you if you want to raise further money for other projects, i.e. home improvements.
Insurance costs are rising so shopping around is more important than ever to get the best deal.
Green is the way forward, and buying an electric car via your business can have some good tax benefits. In some cases, like the cycle to work scheme, you can even do salary sacrifice to allow employees to buy a new electric car. It is deducted before tax and NI so everyone is a winner! Speak to your accountant about the best way of doing this.
Joining a buying consortium can often lead to cheaper prices on printing, stationary etc. It’s worth shopping, as these often come with buying portals that you can monitor if you have teams that need to buy things directly. It can also give you keener prices and help monitor unnecessary spending.
Both business and personal, it’s best to try and pay off the card each month to avoid the interest. Bit if this is not possible, it could save you a lot if you can find one with a lower interest or one that gives you money back.
Credit Card Terminals:
It is always worth checking costs on terminals. Better deals come out all the time and you want to maximize how much of the sale you get to keep.
Just because you took a loan 3 years ago, doesn’t mean you can’t refinance it into a cheaper loan. It’s worth taking a look at all your business loans, as some lenders allow you to refinance a small amount into the Recovery Loan Scheme if it makes sense to do so.
Sometimes it’s worthwhile spending money on things. Income Protection is one particular insurance product that is very under appreciated and potentially known to many. If you own your own home or even rent, income protection could help pay those important bills if something should happen and you are unable to work due to a long-term illness or injury. Taking that huge financials stress away, giving you time to get better and look after your family.
Saving money and having peace of mind is always a good thing for any business owner.
If you would like to discuss any of the above, or be directed to a trusted mortgage and protection advisor, we can refer you to people that can help.