Quote:
I have just had a call from my bank who have refused to renew my
overdraft facility which my business relies on at various times in the
year. Is there an alternative way of financing my business as this will
have serious impacts on our chances of staying in business?
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Hi Sarah,
Firstly, you need to understand why the bank has refused to renew the overdraft. There are some alternatives out there. If you have assets, they could be offered as security to raise a loan to inject cash into the business rather than using an overdraft.
Also if your business is owed money from trading you may well be able to raise cash against those debts via some form of factoring. This is where the lender advances you up to say 85% of your book debts at any one time. That way you get an immediate cash injection into your business and continued advances as and when each subsequent invoice is issued. If you have no assets then the latest Government scheme to support business - Enterprise Finance Guarantee (EFG) can be used to raise cashflow. If you have a pension, that pension could also be used to buy the building you are working from which may free any equity you have which you could use to work with. There are many methods of achieving business finance and an independent financial adviser specialising in commercial finance will be able to guide you efficiently through each one.
I hope this helps. MH