This is the second in a series of articles about innovative new sources of alternative funding. Look out for the next one in a couple of weeks time.
I have just started to work with a funder that is offering overdraft type loans of up to £10,000 for periods of 1 to 10 weeks. As you pay these off you can take out another loan and so on and so forth. The loan is available for sole traders, Limited Companies and Partnerships. 4500 companies have taken out 12,000 loans so far.
This does not replace your normal overdraft, if you are lucky enough to have one, it is just a top up for when you need a bit extra and the bank will not help. People use this type of loan when they need additional seasonal stock, or to pay the VAT or corporation tax, or when large clients are paying late and causing cash flow problems.
Repayments are paid weekly and are taken from your debit card.
They use a 5 star rating, 1 star is the most expensive and 5 star is the least expensive. Depending on your credit risk you will be rated from 1 to 5 but the important thing is that as you work with this funder and pay back on time you can progress up the star ratings.
If you borrow £1000 and pay it back over 10 weeks you will pay back £1144 which equals 14.4% which is expensive, but if you are a 5 star client the same £1000 over 10 weeks you would pay back £1027 or just 2.7%. Naturally you only pay when you have borrowed money. You may borrow for just 2 weeks, pay it back and not need to borrow again for a month or 2. Flexible money on tap.
You pay a one off set up fee of between £150 and £350 and you can then borrow if and when you need it.
60 % of all applicants get approved and another 15% are just asked for more information.
The application form is a simple A4 sheet.
Minimum application criteria:
Minimum 12 months Trading
You and your company must be searchable on line
You must have a current home address
No CCJs for 12 months.
If this is of interest to you or your clients please give me a call on 01932 244810 or email me at peter.kelly@pegasusfunding.co.uk or richard.olsen@pegasusfunding.co.uk
Monday, 23 March 2015
Monday, 2 February 2015
Are you worried about Personal Guarantees? Then think about PG Insurance
Personal Guarantees are the bane of most business owners’ lives and something that they continually ‘moan’ about. Invariably any form of borrowing above say £5-10,000 from a bank or other financial entity will require further security in the form of a personal guarantee from the business owners and directors. This is on top of any security that they may also take over the assets of your company.
As has been seen over the recent past, it doesn’t take a lot for an excellent business to be hit by unforeseen factors that may result in adverse trading and the lender may demand repayment of its money. You may well be faced with a call on the guarantee that you have given. At that point your personal assets are at risk.
Personal Guarantee Insurance is there to meet that claim up to the amount for which you are insured.
Personal Guarantee Insurance
Provides insurance for individuals (usually Directors) who have given a Personal Guarantee (PG) to a lender in respect of the borrowings of their limited company in the event that when called in the company is unable to repay the whole of the borrowings and the PG is called upon.
This type of insurance is the first of its kind to provide protection and advice at the same time. The policy can be purchased at any time either for an existing guarantee or as finance is taken out.
How it works?
The guarantor is protected in the event of the company failing to pay back it’s lender in full. Cover starts at 50% for each guarantor of the amount of the guarantee in year 1, and the percentage increases annually up to 90% in year 5 and subsequent years.
Remember you do not have to cover the full amount of the personal Guarantee that you have signed. You can decide to take some risk yourself and only cover the remaining amount that you feel comfortable with.
Why do I need Personal Guarantee Insurance cover?
You don’t, it is a matter of personal risk, but Personal Guarantee Insurance provides financial security and protection from the unforeseen. If you've ever given Personal Guarantees for loans, then that guarantee could one day be called upon leading to significant costs to you.
This sort of insurance also comes in very useful when directors have different levels of shares in the company and personal wealth.
What does PGI cover?
Should your Personal Guarantee be called upon by the Lender, the Insurance will be in place to pay out the indemnified amount which may clear your liability to your Lender in full.
How much can I cover?
LENGTH OF TIME % COVERED
First 3 months 0%
Next 9 months 50%
Year 2 60%
Year 3 70%
Year 4 80%
Year 5 onwards 90%
Multiple Guarantors
PGI is personal to you but other guarantors can take the cover as illustrated. If there are two guarantors and each takes out PGI then the effective cover will be 90% of the total guarantee in the second year
How much does it cost?
The premium is based on 3% per annum of the level of the cover required. There is also a £200 set up fee and insurance premium tax of 6% of the premium.
To get an instant quote please follow this link https://pegasusfunding.quoteandbuy.net
“By clicking this link it will take you to the quote and buy website of PGI Cover a trading style of Ratae PGI Ltd an appointed representative of Professional Insurance Agents Ltd who are authorised and regulated by the Financial Conduct Authority. They will be able to help and quote you on various insurance products – we do not offer advice or services in this area of Insurance."
Or contact:
Peter Kelly on 01932 244810. Peter.kelly@pegasusfunding.co.uk
Or Richard Olsen on 07976 642432. Richard.olsen@pegasusfunding.co.uk
Wednesday, 12 November 2014
Latest Business Experience Exchange (BeXeX) Event: How Leadership Style Impacts on Culture and Business Success
Our more successful clients are forever curious and challenging. They constantly ask questions about business to their peer group. They are always curious about what works and what doesn’t and what practices have given other business leaders the edge. This is especially the case when it comes to leadership style, the topic of our next BeXeX event.
Every proactive business owner is curious about how some leadership styles can create success whilst others fail to generate results. For example, many have seen the ‘command-and-control’ style of management lose its impact whilst more collaborative and listening approaches have gained ground, especially with the younger Millennial workforce.
At our next BeXeX event on November 25th we will take a much more in depth look at the various leadership styles and how they can be used to determine business culture and success.
During the event, the Home Counties Business Advisors will present an overview of this subject whilst encouraging attending business owners to share stories based on real business experience. We will then facilitate discussion amongst the group to ensure learning and knowledge transfer.
So whether you are relatively new to business ownership or have successfully grown your business, come and share your experiences, ask questions and learn from your peers.
Our next session is at the Riverside café, Thames St, Staines TW18 4EA on 25th November 2014 from 1730-1930.
To book your place, click here, which will take you to Surrey Chambers of Commerce with whom we are hosting this event.
We look forward to seeing you in Staines for a challenging and provocative evening.
Every proactive business owner is curious about how some leadership styles can create success whilst others fail to generate results. For example, many have seen the ‘command-and-control’ style of management lose its impact whilst more collaborative and listening approaches have gained ground, especially with the younger Millennial workforce.
At our next BeXeX event on November 25th we will take a much more in depth look at the various leadership styles and how they can be used to determine business culture and success.
During the event, the Home Counties Business Advisors will present an overview of this subject whilst encouraging attending business owners to share stories based on real business experience. We will then facilitate discussion amongst the group to ensure learning and knowledge transfer.
So whether you are relatively new to business ownership or have successfully grown your business, come and share your experiences, ask questions and learn from your peers.
Our next session is at the Riverside café, Thames St, Staines TW18 4EA on 25th November 2014 from 1730-1930.
To book your place, click here, which will take you to Surrey Chambers of Commerce with whom we are hosting this event.
We look forward to seeing you in Staines for a challenging and provocative evening.
Friday, 7 November 2014
The Rise and Rise of Alternative Funding for SMEs
As peer-to-peer lending, invoice trading and crowdfunding shift into the mainstream, the alternative finance market is set to double in size next year, with the sector set to reach a value of £4.4 billion
The report from charity Nesta and the University of Cambridge said alternative finance to businesses and consumers was set to hit £1.74 billion in 2014, before jumping to £4.4 billion in 2015. The market was only around £666 million last year.
A raft of finance providers have sprung up in the wake of the financial crisis when banks cut back on lending to SMEs, forcing them to look for alternative sources of finance.
The co-author of the Nesta report, Liam Collins said:
“These findings shed light on a growing movement that is revolutionising banking, investing and giving by using technology to simplify the links between those who want to invest money and those who need it. With bank lending to SMEs down again this quarter, it’s no wonder that alternative finance is fast becoming an important source of funding for individuals, businesses and organisations who struggle to access finance elsewhere.
“The UK is leading the way globally, and with significant potential for the market to expand it won’t be long before we see alternative finance moving into the main stream.
By the end of this year, it is expected that alternative British lenders will have provided more than £1 billion in business finance to over 7,000 SMEs during the year - or 2.4% of all bank lending to such companies. This proportion set to increase further as bank lending continues to fall.
Nesta’s study found peer-to-peer business and consumer lending continued to dominate the market, P2P will account for 1.3 billion pounds in total in 2014, while invoice trading will pull in 270 million pounds and crowdfunding 84 million pounds - a 201% increase on last year.
Contact Peter Kelly on 01932 244810 to learn about Alternative funding for SMEs.
The report from charity Nesta and the University of Cambridge said alternative finance to businesses and consumers was set to hit £1.74 billion in 2014, before jumping to £4.4 billion in 2015. The market was only around £666 million last year.
A raft of finance providers have sprung up in the wake of the financial crisis when banks cut back on lending to SMEs, forcing them to look for alternative sources of finance.
The co-author of the Nesta report, Liam Collins said:
“These findings shed light on a growing movement that is revolutionising banking, investing and giving by using technology to simplify the links between those who want to invest money and those who need it. With bank lending to SMEs down again this quarter, it’s no wonder that alternative finance is fast becoming an important source of funding for individuals, businesses and organisations who struggle to access finance elsewhere.
“The UK is leading the way globally, and with significant potential for the market to expand it won’t be long before we see alternative finance moving into the main stream.
By the end of this year, it is expected that alternative British lenders will have provided more than £1 billion in business finance to over 7,000 SMEs during the year - or 2.4% of all bank lending to such companies. This proportion set to increase further as bank lending continues to fall.
Nesta’s study found peer-to-peer business and consumer lending continued to dominate the market, P2P will account for 1.3 billion pounds in total in 2014, while invoice trading will pull in 270 million pounds and crowdfunding 84 million pounds - a 201% increase on last year.
Contact Peter Kelly on 01932 244810 to learn about Alternative funding for SMEs.
Tuesday, 9 September 2014
The Growth of Equity Crowdfunding Around the World
The Crowdfunding Centre takes data from 120,000 crowdfunds across the World
The US leads the way in the number of crowdfunds, However, earlier this month, London originated 248 crowdfunds. The city in second place was Los Angeles with 158.
London has a 33% success rate compared to 30% across the rest of the UK and around 25% globally. It leads the way in big growth industries like gaming and films, which has fuelled a lot of growth in the US, is increasingly finding a home in the UK.
Evidence is also growing of the positive lasting effects of a crowdfunding round. These figures are from a recent report by Crowdfund Capital Partners:
- Reward crowdfunders reported an average sales revenue rise of 25%
- Equity crowdfunders reported an average sales revenue rise of 350%
- An average of 2-3 new employees are taken on after crowdfunding
- Just over half of firms that contributed to the report said crowdfunding was their first choice method for raising funds
- Crowdfunding embraces diversity. Pitches lead by women and minority groups is 40%, compared to 8% in the ‘old economy’.
To learn more about Crowdfunding please contact Peter Kelly on 01932 244810.
Friday, 20 June 2014
Funding for Growth
Now that the economy is firmly on the mend, management teams have a new challenge to think about and that is how do they obtain the funding that they need for the growth that they are now experiencing. It is vital to remember that more companies go to the wall in a recovery than fail in a recession. Over trading is a very real danger.
The best place always to go for funding is your own bank. You have a history with them and they should understand your business better than any other funder. Unfortunately over the last 6 months bank lending to businesses has fallen by a staggering £4 Billion.
So if your business is growing and your bank is not lending, then who do you turn to?
There are many independent sources of finance for growing companies. The independents are much more flexible in their terms and their attitudes and being smaller you are much more important to them.
Invoice Discounting and Factoring is one of the easiest to obtain and most flexible ways of raising finance for growth as this form of finance grows as your sales grow. If you do not want to or need to sign up for a full ledger facility then consider using selective or single invoice discounting. You just finance the invoices that you want to when you want to.
Trade Finance is also available to finance firm orders that you have won but where you do not have the resources to fulfil. The trade finance provider will purchase the goods for you and after you have delivered and invoiced you then pay the loan back.
Debt Crowdfunding is another interesting a quick way of raising funds from £5,000 to £1,000,000 for companies that have 2 years of accounts filed at Companies House. This is where ordinary members of the public ‘Crowd’ together to lend small amounts that aggregate into one loan for a business.
Short Term Loans This type of loan has sprung up since the beginning of the year. These companies lend from £3,000 to £100,000, depending on risk, for periods of 1 to 12 months, for companies that have been trading for at least 12 months. Some will lend to companies with adverse credit histories but then must not have any CCJs. This type of funding is very useful for purchasing stock that is fast moving and where the profit margins are good.
Pegasus Funding Resources is your one stop shop for any type of funding. Give us a call today: 01932 244810
The best place always to go for funding is your own bank. You have a history with them and they should understand your business better than any other funder. Unfortunately over the last 6 months bank lending to businesses has fallen by a staggering £4 Billion.
So if your business is growing and your bank is not lending, then who do you turn to?
There are many independent sources of finance for growing companies. The independents are much more flexible in their terms and their attitudes and being smaller you are much more important to them.
Invoice Discounting and Factoring is one of the easiest to obtain and most flexible ways of raising finance for growth as this form of finance grows as your sales grow. If you do not want to or need to sign up for a full ledger facility then consider using selective or single invoice discounting. You just finance the invoices that you want to when you want to.
Trade Finance is also available to finance firm orders that you have won but where you do not have the resources to fulfil. The trade finance provider will purchase the goods for you and after you have delivered and invoiced you then pay the loan back.
Debt Crowdfunding is another interesting a quick way of raising funds from £5,000 to £1,000,000 for companies that have 2 years of accounts filed at Companies House. This is where ordinary members of the public ‘Crowd’ together to lend small amounts that aggregate into one loan for a business.
Short Term Loans This type of loan has sprung up since the beginning of the year. These companies lend from £3,000 to £100,000, depending on risk, for periods of 1 to 12 months, for companies that have been trading for at least 12 months. Some will lend to companies with adverse credit histories but then must not have any CCJs. This type of funding is very useful for purchasing stock that is fast moving and where the profit margins are good.
Pegasus Funding Resources is your one stop shop for any type of funding. Give us a call today: 01932 244810
Tuesday, 27 May 2014
Simple Export Finance for SMEs
An existing funding provider has just introduced a new service to help small companies enter the export marketplace with a minimum amount of paperwork or risk.
This new ‘Export Overdraft’ is not only available to established companies but also to start-ups and recovery situations. The fees are simple with an arrangement fee, normally below £500 and a single interest fee depending on the risk and the length of the loan. This is not suitable for long term debt but for loans from a couple of weeks to up to 60 days. Longer loans of up to 90 days are available but then the charges may make it too expensive.
It works in the same way as single/ selective invoice discounting.
The exporter tells the finance house who they are exporting to, they then arrange a credit limit with a corresponding finance house in the destination country concerned. They at present have arrangements with 65 corresponding finance houses in mainly the EU and the OECD countries.
Once credit approval has been obtained, the goods can be shipped and invoiced. Letters of credit and bills of lading are not required. As part of the service the local finance house can arrange documentation in the customers own language. Once proof of delivery has been obtained then the funds can be drawn down.
For further details please contact:
Peter Kelly: 07778 670 236
peter.kelly@pegasusfunding.co.uk. London, South East, & East Mids.
Richard Olsen: 07976 642432
Richard.olsen@pegasusfunding.co.uk Cambridge, East Anglia, East Midlands.
This new ‘Export Overdraft’ is not only available to established companies but also to start-ups and recovery situations. The fees are simple with an arrangement fee, normally below £500 and a single interest fee depending on the risk and the length of the loan. This is not suitable for long term debt but for loans from a couple of weeks to up to 60 days. Longer loans of up to 90 days are available but then the charges may make it too expensive.
It works in the same way as single/ selective invoice discounting.
The exporter tells the finance house who they are exporting to, they then arrange a credit limit with a corresponding finance house in the destination country concerned. They at present have arrangements with 65 corresponding finance houses in mainly the EU and the OECD countries.
Once credit approval has been obtained, the goods can be shipped and invoiced. Letters of credit and bills of lading are not required. As part of the service the local finance house can arrange documentation in the customers own language. Once proof of delivery has been obtained then the funds can be drawn down.
For further details please contact:
Peter Kelly: 07778 670 236
peter.kelly@pegasusfunding.co.uk. London, South East, & East Mids.
Richard Olsen: 07976 642432
Richard.olsen@pegasusfunding.co.uk Cambridge, East Anglia, East Midlands.
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