How to increase business resilience with finance

There’s a lot of uncertainty facing businesses at the moment. High inflation and energy bills have led to greater instability in the economy, but there are still more potential challenges yet to come. Businesses may need to find alternative avenues to shore themselves up and help prepare them for the unexpected. Here, we take a look at how business finance could help your business become more resilient, so you can take these challenges head on.

Boosts your cash flow

Maintaining a healthy cash flow can help ensure you can pay your staff and suppliers, deliver your contracts, replenish your stock and earn profits. With recent developments pushing costs up, you may find your cash flow is being depleted more quickly than before.

Taking out business finance is one way to funnel some extra cash flow into your business. If you need a quick cash injection and only want to spread out costs over a few months, then a line of credit could be the right choice for you. For businesses looking for a more substantial amount, or who want to borrow over a longer term, a business loan might be a better fit.

Creates a buffer for when the unexpected hits

Sometimes your business needs to pivot at a moment’s notice. Whether it’s a pandemic, increased demand or supply chain disruption, having extra finance can help create a buffer to deal with the unexpected. Building up a rainy day fund from revenue alone can be tricky though.

Business finance is another method for securing that cash flow buffer that you need. Whether it’s in the form of a line of credit that you can use as and when, or a business loan that allows you to keep the cash safely tucked away, finance can give you the breathing space to navigate uncertain times and plan with confidence.

Allows you to take advantage of new opportunities

Part of growing your business’s resilience is being able to take advantage of new opportunities when they present themselves. But if you don’t have enough spare cash to take up that bulk discount on stock, or can’t meet the asking price on that shop front you’ve been eyeing up, then business finance could be the difference between seizing that opportunity and letting it go.

Since speed is so key in decisions like this, we’ve focused our efforts on making our application process as quick and efficient as possible. No matter which finance option you choose, you can apply in just 10 minutes and get a decision in as little as 1 hour, allowing you to seize opportunities when they come.

Potential to invest in growth

Another avenue for creating business resilience is through growth. Business growth enables you to diversify your markets or products and makes you less reliant on what you have, so you have multiple streams of income you can rely on.

With business finance, you can look to capitalize on some of these growth opportunities. Business loans allow you to pay back over a longer term, giving you an influx of capital which you can then pay back in smaller monthly repayments over up to 6 years. This can tide you over until your new venture bears fruit.

Consolidating or refinancing can help to reduce monthly repayments

If you have existing business debt, consolidating or refinancing could help you reduce your monthly repayments. Some forms of debt, such as credit cards, have variable interest rates which can be higher than a business loan. Consolidating allows you to have a single, fixed monthly repayment. You can also spread payments across a longer term, reducing outgoings and freeing up working capital.

Refinancing is another option if you have a higher, or variable, interest rate. You could get a lower interest rate to cut overall costs, and if it’s a fixed rate, your repayments will stay the same during the duration of your loan. This means you always know how much you’re repaying every month.

Learn more about how to consolidate your business debt here.

What are my options for financing from Funding Circle?

We’ve already briefly mentioned some of the finance options available for pursuing some of these avenues, but it’s worth exploring these in more detail.

Business loans

Our business loans allow you to borrow £10,000 to £500,000 for up to 6 years and are offered at competitive, fixed rates. If you think this could be the right choice for your business, you can check your eligibility here.

Line of credit

FlexiPay is our new line of credit service which enables businesses to pay suppliers upfront and spread the cost over 3 months. You get access to a line of credit from £2,000 to £50,000, and then make a purchase online which will be paid to the supplier in your business’s name. You’ll pay it back in 3 equal monthly installments and, once it’s been repaid, the credit is available to use again. It’s free to set up, there’s no annual charge give no interest either — you’ll simply pay a 3% fee on each invoice. If this sounds like the right option for you, you can check your eligibility for FlexiPay here.

20/09/22: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.

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