With recent announcements of restrictions fully easing in England and most of them also lifting in devolved nations, it is with no surprise that an almost audible sigh of relief erupted from the community of business owners across the country. After a tumultuous couple of years, and despite many other challenges still to be tackled, it seems as though the road to recovery is finally fully paved.
One of the many lessons collectively learned during the pandemic was that liquidity is king. Cashflow is required not only to grow a business but also to simply keep it moving day to day. As this (hopefully) final phase of recovery goes full steam ahead alongside rising costs in most sectors, business owners will need to ensure they have a robust cashflow plan to prevent being faced with unmanageable debt.
The reassuring thing about debt is that it is not always bad. Sensitive, planned-out and strategic debt through the right funding solution(s) can tilt the scales and help businesses meet ambitions. Despite what the stigma that remains around debt would have us believe, when managed in the right way it becomes a powerful tool that helps business keep moving.
Good debt vs bad debt
Debt is a part of economics almost impossible to avoid in everyday life, be it through bank overdrafts, credit cards, mortgages or monthly instalments on a car for example. Yet, unless it becomes unmanageable due to unforeseen circumstances or a lack of financial planning, we rarely view those as “bad debt” – they are instead deemed helpful to access the things we need or want without having to part with all of our money in the bank at once.
Businesses should think of business funding in the same way we do personal finances. Good debt – or funding facilities in this case – help businesses keep moving by taking the daily pressures off cashflow, enabling to meet their ambitions without having to dilute control or ownership (as equity would for instance).
Good debt is simply a sensible investment into a business which will not impact on its financials. The best kind of debt is well thought-of, tailored and planned out so that it fits all requirements and has very little potential to turn into bad debt.
Bad debt comes in many ways: a client unable to make a payment, or funding that is not fit for purpose and which does not help create enough revenue. Regardless of its nature, bad debt can have disastrous consequences for a business, especially if its cashflow requirements are already impacted by difficult trading conditions such as the ones we have been navigating through for the past two years.
So how can a business make sure the debt they take on is the right kind?
Asset-based lending helps businesses keep moving
Asset-based lending is a flexible and secured way of accessing the right funding. Because the solution is tailored to meet each unique needs, businesses can be reassured the debt they are taking on is good for them and their situation.
At Ultimate Finance we provide funding solutions against many assets: receivables, plant and machinery, and property. This ensures that every facility we provide will help its recipient keep moving towards their own ambitions rather than offer a one size fits all approach more commonly seen with loans and overdrafts.
A funding solution for every ambition
Receivables: Working Capital Finance
- Up to £7m
- Funding up to 95% of unpaid invoice value
- Revolving facility that grows with a business
- Dedicated Relationship Manager
- 24/7 access to online account
- Options to add confidentiality, collection services and debt protection
- Sector specialisms for Construction, Recruitment and Trade businesses
Plant and Machinery: Asset Finance
- Up to £1.5m
- Up to £500k per asset
- Removes the need for hefty deposits
- Repayments up from one to five years
- Hire purchase, lease and refinancing available
Property: Bridging Finance
- Up to £3m
- Up to 75% LTV
- Funding up to 100% of the purchase price for Below Market Value (BMV) properties
- Residential, semi-commercial, commercial and land with planning
- Repayments up to 18 months
- Decision in principle within 24 hours and a fully credit backed offer within 72 hours
Multi-asset solution: Structured Finance
- Enables a business to borrow against a mix of receivables, plant and machinery, and / or property, with cashflow loans in addition
- Up to £10m
- No restriction on single line assets
- Dedicated deal team with one main contact to make things seamless and progress quickly
- Single Relationship Manager to offer on-going support across the whole facility
Your Funding Partner of Choice
With our facilities we focus on delivering funding with speed, flexibility, simplicity and excellent personal service so that businesses can focus on what makes them successful rather than worry about finances and paperwork. That’s because we believe in becoming the funding partner of choice for Introducers and business owners across the UK, and we know that to do so relies on providing easy and tailored access to the right funding at the right time.
Our emphasis on excellent service means that we not only provide valuable asset-based funding facilities, but we also offer the dedicated support that helps businesses go further – from expert Regional Directors to attentive Relationship Managers, our customers are assured to have a single point of contact they can rely on at all times. This commitment has already seen us attributed the industry-leading score of 4.9/5 on Trustpilot and recently awarded the Lender of the Year trophy at his year’s Yorkshire Financial Awards.