In the current economic climate, times are tough for businesses in all sectors. Recently we’ve seen the prices of energy, raw materials and transport soar to unprecedented levels. With inflation comes demands for higher wages - oh, and the added pressures no one needed: serious supply chain disruptions and interest rate rises. It’s no wonder so many are feeling the squeeze.
Of course, in the face of it all, you want to keep prices as steady as possible for your customers and stay competitive. But as the pressure intensifies, you can feel you’ve been left without a choice.
Instead of being a slave to your finances, you can actually make your financing options work for you. These are some of the best solutions to consider when you’re looking to protect your profit margins.
Refinancing your commercial property
No matter how long it’s been, both the market and your business’ circumstances have likely changed since you originally applied for your mortgage, and there’s a good chance that today, there’s a better solution out there.
Switching to a different structure may mean you’re paying out less over the course of time, which can contribute greatly to your long-term financing situation. It could also reduce the term of your mortgage, so a huge part of your overheads are gone quicker.
In the short term, refinancing your commercial property can release equity for further investment. This provides a real boost to cash flow, whether you use the extra cash to deliver your service more efficiently, expand your offerings, or simply deal with mounting bills.
However, we know that refinancing property isn’t the right answer for every situation. You may already be on a great rate or have a significant early repayment charge (ERC) which puts switching out of question.
Reassessing your asset financing
As a business, you’ll have hard assets which hold their value over time, and soft assets which depreciate in value. Some of these you may own outright - these plus any you’re currently financing or need to purchase in the future are worth looking at carefully.
New flexible funding options may be a lot more affordable than you think, and you should be sure that your repayment plan of choice is serving your needs. For example, you may currently be leasing assets when a hire purchase scheme is actually more appropriate. This option might offer lower monthly repayments, and you’ll own the assets outright at the end.
On the other hand, lower deposits and different tax efficiencies linked with finance leasing might be the better option, giving you the flexibility to upgrade on a regular basis.
Applying for grants
Free money? It often sounds too good to be true, but there’s a huge range of grant funding out there. If you’re eligible, you should definitely make the most of it!
Most grant funding is regional, so you’ll want to know all about the funding relevant to your geographic area, the size of your business and the sector it operates in. Then you’ll need to prepare applications carefully so you stand a good chance.
Rest assured that there’s plenty of funding out there for businesses and using your options wisely can make more of a difference than you might think. What we would advise, however, is that you reach out to a reliable finance broker so you’re confident you’re really getting the best deal.
At Funding Round, we help businesses which typically have more complex borrowing needs - always finding a personalised solution that works in the short and long term. From advising on whether remortgaging makes sense, to pointing you to the grants you could be eligible for, we’re here to help! Get in touch with our friendly team to find out more.