The Benefits of Getting a Cash Flow Loan in the UK

by | Jun 23, 2021 | Capital Raising, Small Business Loans

When you’re running a small business in the UK or any other country for that matter, it’s common to experience some unexpected sales highs and lows. Both sales highs and lows can have a massive effect on your cashflow. Sales too low and your cash balance will become depleted. Sales higher than usual and you’ll need extra funds to pay the input costs before you’re paid from your client.

If you’re experiencing some difficulties in your business, it’s crucial that you learn how to effectively manage your cash flow, as this can make or break a business. So many businesses go under simply because of poor cash flow management and not using cashflow finance options available to them.

Without the appropriate amount of cash flow, you might find there are times when you can’t even pay for equipment repairs, or even pay your monthly bills. These are the times when you need additional cash flow, and a cashflow finance is a perfect solution to help you through this period. Cashflow loans help you grow your business by allowing you to continue operating at 100% capacity when funds might otherwise have held you back.

In this article, we’ll be showing you how you can take advantage of business loans for cash fl ow stability and growth in your business.

Firstly, you’ll need to assess if you really need a cash flow loan. It’s essential that you assess your business finances before you apply for additional funding. If your current assets aren’t enough to meet your current liabilities, then you may find yourself in need of cashflow financing in the form of an Unsecured Business Loan.

cash flow concept

A few tips to help you identify cashflow needs:

  1. Create an income statement – having an income statement will help you determine your business’s expenses and revenues. This will also tell you how much free cash flow you have.
  2. Know the costs of your operating activities – it’s important to know how much money you need to spend to produce your products and services, and the amount of time to take for your customers to pay you. It’s also important to know how much money is currently in your accounts receivable.
  3. Use an accounting software – if you’re a business owner, then chances are you’ve already used or have access to accounting software since this is an essential tool that can help you calculate your business’s cash flow patterns. In fact, you can find several options online, both free and paid tools.
  4. Determine your investment activities – When you are assessing your cash flow, you should also check your current investment activities, and this will include your real estate, equipment, and other investments that you made for your business.

4 Effective Methods to Utilize a Cash Flow Loan for Growth

  1. Always maintain money on-hand that you can use in the event of an emergency

As a business owner, you never know when a business emergency could rise, and these are the situations that you need to tend to immediately. It’s important to have the right amount of small business cash flow so that you can afford these necessities, and you won’t be forced to cut down your other expenses. That is why it’s essential to learn the proper way of handling cash flow because this skill will ensure that you have the cash for any type of crisis in your business. To assist this, you can open a business line of credit or apply for a small business term loan.

  1. Save enough money for new exciting Initiatives

Whether you’re looking to expand your business, add new technological system, or you’re planning to acquire a new line of inventory, it is important to have enough cash flow that will enable you to fund these projects.

You need to understand that projects like the ones mentioned typically require additional costs, so with added funding, you don’t have to worry about any deficit in your cash flow.

  1. Always check your finances – Don’t borrow more than you can afford.

Another reason why you need to develop better cash flow management is that it is crucial to your business’s day to day operations. In fact, when you don’t have the steady cash flow available, you risk racking up debt that you can’t pay back.

Some business owners incur too many charges to their business credit card when they encounter issues that affect their cash flow, and this often led to bad debt, which you need to avoid in your business. It’s easy to incur too much debt because & this can affect your credit score, especially if you can no longer afford your loan repayments. The best way to know if a business loan is right for you is to speak to your accountant

  1. Prepare your business to go through the lean months

Honestly, it can be stressful when your business is not meeting its sales goals. It’s important to have the funds available to you to continue with your day to day operation while trying to increase your sales.

Most business owners have difficulties with their cash flow when they are going through a sales lull, which means they can’t afford all their monthly costs. To avoid these kinds of issues, you need to ensure a healthy cash flow by getting a small business loan, which you can use during these times.

Excellent Credit Score with tablet computer

Do You Really Need to Improve Your Business’s Cash Flow?

While there are many ways to get a business loan, Most of these will require equity in property. At Bizzloans we offer something a little different. Our business loans are unsecured, meaning they don’t require equity in property. This means that business owners don’t necessarily have to risk their house to grow their business.

While there are many ways to utilize a business loan, using it to maintain your cash flow can enable you to pursue new opportunities. If you’re thinking of getting a business loan, you need to do your own research and find the most ideal online lender that will provide you the best deal in the market.

You can always contact us at Bizzloans for any type of business loan queries. We’re always available to help your financing needs.

No Security Necessary

The main thing that makes unsecured loans more attractive than secured loans is the fact that there’s no security. It might be an obvious thing to highlight but it clearly matters. You won’t be weighed down by the pressure and worry associated with having collateral hanging over you and potentially being lost to the lender if you fail to make repayments. If you don’t want to take the risk of losing your collateral, you just need to opt for an unsecured loan instead. It’ll allow you to avoid any risks associated with secured loans.

Build Up Your Future Credit Score

By taking out a loan and then paying it off on time, you will help to build or repair your credit score. Many companies are dealing with poor credit, but by taking out an unsecured loan with a lender that is happy to lend to companies with poor credit, you can start to turn the situation around. Meeting regular repayment deadlines shows the world that you are able to stay on top of your financial obligations and pay off the money you owe, and that will only help your business going forward.

Why Your Business Might Want to Take Out an Unsecured Loan

There are lots of reasons why your business might take out a loan, as well as reasons not to. You shouldn’t take out a loan to cover running costs, but if you want to do other things, such as the things we’re going to discuss below, an unsecured business loan can be ideal.

Grow and Expand

Most entrepreneurs have big plans for their businesses. They want to ensure that their business is one that’s got a bright future. So if the time has come for you to grow and expand your business, you should think about whether taking out an unsecured business loan might help you to do that. It could be exactly what you need to get your business moving in the right kind of direction. It takes money and investment to grow your business and a loan might just be the ideal solution.

Take on More Clients and Customers

If your business doesn’t currently have the resources to deal with more customers and clients, it could be time to scale things up. However, that’s something that costs money, whether you like or not. Taking out an unsecured business loan could help improve the resources your business has available. It could mean hiring more people so that you have the human resources needed to take on more clients and make more customers happy. The loan will cover the costs associated with doing that and it’ll pay for itself if you’re able to improve your profits as a result.

Fund a New Marketing Campaign

Maybe it’s the case that attracting new customers to your business is where your problems lie. It’s not always easy to get your voice heard and make people aware of why they should be taking notice of your business. An unsecured loan could be used to fund a new marketing campaign that gets your message out there and makes more people interested in your business and what it’s offering. So if you have an idea for a marketing campaign that you think might work but you don’t have the financing for it, consider a loan.

happy business owners analyzing the need for cash flow loan using laptop

The chance to improve your business in the many ways mentioned above offers you a real opportunity that you might want to grasp. Secured loans can offer the same access to financing but come with more risks to your business. With an unsecured loan, you can reap all the rewards that come with having the cash to invest in your business without having to worry about the risks adversely affecting the business in the future. The chance to improve with fewer risks attached to that chance should not be ignored or dismissed.

The Requirements for Getting an Unsecured Business Loan

There are some requirements you’ll need to be aware of before you take out an unsecured business loan. These aren’t too harsh or restrictive at all, but they are important.

24 Month Limit

When you take out an unsecured loan from Bizzloans, you have to pay the loan back within 24 months. That’s the maximum repayment term that’s on offer. Of course, that won’t be a problem for the vast majority of businesses out there. It’s important that you look at the finances closely and decide for sure that this is something your business is going to be able to do. You’ll have a chance to do this when you get a quote from us, so you’ll know exactly what you’re signing up to.

Business Bank Statements

To ensure your business is in a financial position to take on a loan of the size you’ve applied for, you’ll need to simply submit your business’s bank statements. This allows us to ensure that we lend responsibly and don’t burden you with a debt that is too much for you to take on. It’s in both your best interests and ours that you’re able to handle the loan that you take on.

Photo ID

To ensure everything is correct and proper, and you are who you say you are, you have to submit a photo ID. This is common practice and ensures that all financial transactions are above board and in order. It’s very easy to do and needn’t be a headache for you. Once we are satisfied with your application, you’ve provided the bank statements and we’ve checked your ID, it won’t be long before you have access to the loan you applied for.

Getting an unsecured business loan for your company could be just what it needs right now. It’s a much safer option than taking out a secured loan and you’ll be accepted much faster. Don’t hesitate to get in touch with us here at Bizzloans if you’re thinking of taking out an unsecured business loan.



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