BusinessLoans.ie often has calls from business owners in need of short-term business loans. The reasons can vary but the key theme is a cash flow problem that’s being solved in the coming months wtih a job being finished, debtor paying or sale of stock. The immediate stress is making payroll or meeting other obligations as they fall due. Cash flow forecasting is important here because as soon as business bank statements start showing referral charges for missed direct debits and standing orders, loan quote options narrow quickly. Here are options to bridge a shortfall in cash flow:
Simple unsecured loans
If the accounts are in profit and the bank statements don’t have too many missed payments a simple unsecured loan can overcome a short-term cash flow issue. Credit teams can quickly indicate if adesired amount is possible, with a few simple documents. If a business doesn’t have an up to date tax clearance certificate, solutions can still be available but at higher rates.
Asset refinancing
Sometimes losses on accounts or bank statement performance make unsecured loans too challenging for approval. Businesses that have assets of value, that are relatively new, are owned outright or with little finance outstanding, might be able to get a working capital loan through refinancing. A list of assets can be assessed to see how much can be achieved.
Property backed bridging loans
Businesses might own land or buildings that can be used as collateral for bridging loans. Such loans can be used for a variety of reasons, from solving a cash flow issue to freeing up capital for a renovation of another property or purchase at an auction. Loan size is key here. Lenders might release up to around 70% of the value of the business’s property, but because of expensive fees for due diligence in organising the loans you might be lucky to find a lender with a starting loan size of €250,000. In such cases, if it was 70% Loan-To-Value, the value of the collateral property would need to be €325,000.
One-off invoice finance
Invoice finance, through online applications and Open Banking, has become easier for one-off or on-demand services to help business owners whenever they need it rather than being tied into long-term contracts. If a business has reputable Irish limited company debtors this will be an easy process because lenders need to check online systems to see if they can get credit insurance on the debtor. Businesses can get a list of debtors checked to see what can be financed and to what limits.
Merchant cash advance
If a business uses a card machine or merchant account then short-term loans from 3 months are possible based on the volume of sales. This can be an easy choice with a quick turnaround time. Businesses also enjoy a flexible repayment that works with their cash flow cycle.
If your business needs a short-term loan, medium-term loan or long-term loan we’ve got you covered. Call the BusinessLoans.ie team for fast finance quotes on 01 55 636 55 or email hello@businessloans.ie.
