Making important financial decisions can be daunting, especially when you're a small business owner. I remember purchasing my first business at the young age of 22. It was a beauty salon where I had been working for only three months when the owner announced she was pregnant and asked if I might like to buy the business. I was proud of myself for scraping together the £50k I needed to make the purchase, with a little help from my parents in the form of a personal loan that I would pay back over time and a small business government grant.
For almost 15 years, I owned and ran that beauty salon until I decided to sell it after the birth of my daughters. Fast forward to 2022, and my little girls were no longer so little. I was ready for my next challenge, which was corporate finance.
When I first started, I discovered a lot of things I wish I had known when I owned my business. For instance, most business owners like myself turn to their high street bank for funding, without realizing that other funding products and options are available. That's where corporate finance brokers come in. They can help business owners understand the range of funding products on the market and find the best fit for their business.
In my case, I wish I had known about the Merchant Cash Advance, which would have been perfect for my business. Since most of my clients paid with debit or credit cards, the amount I could borrow would have been based on my card payment turnover. The repayments would have been flexible, expanding or contracting in line with card sales. In a busy month like December, I would have paid off the loan quickly, but in quiet January, I might have made very few payments. Plus, the repayments were minimal, around 5% of the card sale, and were taken automatically without affecting the time it took for the card payment to reach my business bank account.
Speaking to a business finance broker, rather than relying solely on my bank's relationship manager, would have been the best thing I could have done for my business. Business finance specialists can provide a personal business review to determine which finance product would be most beneficial and then source the best deal on the market for that specific product. The best part is that the services they offer are usually free, with no obligation to proceed with the quotes they obtain for you.
Every business needs an arsenal of professional weapons. A good accountant can help with your tax return and also pinpoint financial issues. Cash flow forecast projections can highlight weak spots in the year that might need a little financial support. Business finance tends to focus on two main areas: cash flow and growth. All businesses must manage to maintain a healthy bank balance. Growth is often obtained after investment into machinery, premises, public exposure, and bringing in extra staff. Getting a cash injection to keep cash flowing or to reinvest in the business can lay in the hands of a business finance broker.
If you're an SME looking to access finance, you're often better served by enlisting the support of a commercial broker. Many lenders are withdrawing their high-street presence, and commercial finance brokers have firmly stepped into the role of the modern-day bank manager, but with the added benefit of providing a wider array of funding solutions to their clients.
However, it's important to find an ethical broker who will help you find the best funding product deal rather than placing you with the highest-paying lender. A good business finance specialist will work alongside your accountant to help you secure the funding you need to grow your business.
After a 20 year as a business owner within the beauty and hospitality industry Hilary pivoted into corporate finance. Her experience and knowledge spans the fields of Management, Marketing, Branding, Social Media, Communications, Digital Media, Business and the Beauty Industry.
Hilary is your go to girl when it comes to business funding. As an ex business owner she understands what businesses face on a day to day level.
You can connect with Hilary here.