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

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.

HCBA and Surrey Chamber of Commerce Event

BeXeXTM is an event format and methodology that enables peer to peer sharing of valuable information between business leaders and helps them solve their challenges.
Looking for fresh ideas to boost your business?
Got a business problem that needs a new perspective?
Want to share and gain experience with fellow business owners?
Then why not join us in Woking at 5.30pm – 7.30pm on Tuesday 3rd May for our Business Experience Exchange event where we will be providing business owners and directors the opportunity to exchange ideas and discuss issues as a group.

HCBA are running the event in partnership with the Surrey Chambers of Commerce.


There is no agenda except the one you help create. There will be other business experts on hand to discuss any business issue you want to raise, however the experts aren’t the only ones who know a thing or two about running a company. Some of the best ideas come from those that manage their own business, who not only have been there but are there and doing it, business people like you!
Benefits of Attending
 Gain valuable business insights
 Get to know your business peers
 Find solutions to local business issues
 Improve your motivation and confidence levels

This event will also include a short presentation by social media marketing expert Susanne Currid on maximising the impact of your social media communications. Her presentation will include case studies from local Surrey companies and will offer advice on using social media to help improve your business search engine results on Google.

Book a place now at Surrey Chambers of Commerce Events. Go to: http://hcba.co.uk/bexex/

Event Date: Tue 3rd June 2014
Time: 17:30 – 19:30
Location: GU21 6QX
Venue: Arcom IT Headquarters, Export House, Cawsey Way, Woking

New type of short term borrowing now available

Since the start of this year a new type of funder has appeared. They specialise in lending sums up to £100K for short periods of time. One I am dealing with at the moment will lend for as short a time as a few days, a few weeks or a few months, up to a maximum of 12 months.

This type of funding is not cheap but very useful if you need extra funds for just a month or two. One client needs to buy additional fast moving stock that has a good profit margin, he cannot get funding from his Bank so this type of short term funding is ideal.

Some of these funders want Personal Guarantees but others don’t. Typical charges, depending on risk are from 0.1% to 0.3% per day plus arrangement fees.

One funder has a useful revolving facility where a maximum level of funding is agreed and you can take money out and put money back in as the need arises and you are only paying interest on the money used at any one time.

The main criteria for these loans seem to be at least one set of filed accounts, followed by a sales forecast that shows that you can afford the repayments.

This is not cheap money but for short term borrowing it can be useful.

South East Business Boardroom

We are pleased to announce the speakers and agenda for the next South East Business Boardroom meeting at the Five Bells in Chelsfield BR6 7RE.

We meet in the bar at 1:30 p.m. for networking. Free sandwiches at 1:45 p.m. and the meeting will start promptly at 2:00 p.m.

There will be a break for coffee and teas at 3:00 p.m.

Agenda

Individual introductions and an informative introduction to the group by the Chairman.

All attendees will have a one minute opportunity to introduce their business.

The main speaker Paul Duckworth will present Creative Heads Ltd. a creative design agency. Based in Canterbury, they help to grow businesses by enhancing their brand image and marketing them effectively across all communications channels.

The second speaker David Gillespie will then present Group Trader, a buying and trading self help group based in Essex but trading throughout the South East.

Business to Business. A time for all attendees to share business opportunities, and to look for advice and guidance with challenging cases or situations.

Discussion on speakers for the next meeting.

Any other business.

Date of next meeting.

Close of meeting 4:30 p.m.

Networking in the bar afterwards.

Places are limited to 20 attendees only. Please RSVP a.s.a.p. to avoid disappointment. Go to:http://www.meetup.com/South-East-Business-Boardroom/events/179196652/

Latest SME Monitor Results

In the latest SME Monitor produced by Cebr for Aldermore Bank many positive indicators show that the economy is on the mend.

Here are just a few of the indicators that the report highlights:
• The UK economy expanded by 0.7% quarter on Quarter in Q4 2013.
• Recovery is expected to gain further momentum over 2014 as a whole, as GDP is projected to rise by 3.3% year on year
• Growth is coming from all three major industrial sectors, production, manufacturing, and services.
• Annual cost inflation for small and medium-sized manufacturers fell back in Q4 2013 to 0.2% down from 0.7% in the previous two quarters
• Borrowing costs continue to fall back for UK SMEs, with the median interest rate offered to medium-sized enterprises falling to 3.2% in November 2013. Rates have not been lower than this since June 2009.
• The same goes for small enterprises where the median rate offered was 4.4% down from 4.8%
• The confidence level for SMEs climbed to +39.7 this quarter, its highest reading since Q1 2010.
• In Q4 2013 there were 3,800 business failures, down from 4,200 the previous quarter

All in all the future is definitely looking brighter for SMEs.

Can a recovery in the economy be dangerous for SMEs?

The answer is yes.

Naturally we all welcome the emerging recovery we are experiencing in the UK but SMEs should look very carefully at their finances as they need to be very aware that the pattern established following previous recessions is that more businesses go bust as the economy recovers not less. Typically businesses slowly wind down during a recession until they eventually run out of cash. Economic growth is often the last straw for them. They need to fill new orders and recruit more staff to meet demand but just cannot get any more credit and administration beckons. They may also have been slow in paying VAT and PAYE and built up large arrears which now must be paid as during a recovery the tax man becomes more aggressive.

Pegasus Funding Resources can help SMEs that find themselves in this situation and in need of growth funds to take advantage of the recovery.

Types of funding that are available in this situation include:

• Trade Finance to finance the importation of goods needed to fulfil orders
• Stock Finance to make certain they can meet increased demand
• Invoice discounting & Factoring to finance increasing debtor ledgers, and this also includes single/selective invoice discounting for those that do not want to sign up for more than the occasional invoice
• Turnaround Angel Funding to bring in new capital and ideas
• Sale and leaseback of existing plant and machinery to fund new equipment and add to working capital
• Debt Crowdfunding to fund growth and asset purchase