For businesses that have started from scratch, asset-based lending could provide a timely boost.
On 18 November, the Sunday Telegraph published a special report on Finance and Accounting.
BM Structured Finance provided in depth industry commentary and expert advice on the importance of Asset-based Finance for entrepreneurial businesses.
The following article featured in the Sunday Telegraph Finance and Accounting Special Report.
The traditional solution of getting a bank loan or overdraft is no longer readily available for many of today’s struggling businesses in need of working capital. In the first quarter of this year, high street banks turned down 27,000 applications from SMEs, equating to £1.3bn.
Fortunately for entrepreneurs who have built their company from the ground up, there is an alternative solution.
Asset-based lending is not a new concept; approximately 43,000 SMEs in the UK use it, but there is still little understanding around the benefits – such as flexibility, effectiveness and simplicity – of this solution.
However, one of the problems is that many accountants and solicitors don’t recommend asset-based lending, simply because they don’t fully understand it. As a result, neither do businesses. But there is plenty of free advice available.
“What’s important is that people understand that they can get help to look for these products in the market, at no cost to them,” says a spokesperson for BM Structured Finance. “I work with a large number of businesses, showing them their options and helping them source the right funding solutions.”
Borrowing against assets gives business owners flexibility and freedom. The guarantee on these loans is usually less personally onerous than those given to banks for an overdraft or a loan. Most importantly though, asset-based lending products can be tailored on a case-by-case basis, to suit individual needs.
BM Structured Finance, working alongside BM Advisory, the restructuring experts, is the finance brokerage arm of the Beavis Morgan group, a mid-tier accountancy and business advisory firm with a long-standing client base. BM Structured Finance provides a free consultative service that offers impartial advice on all aspects of asset-based lending.
“Our role as a consultative brokerage is to understand the business and its financial requirements. We’ll go over various options and look at the most appropriate lenders, we’ll review their terms and conditions to ensure that the business knows what they are signing up to, and that they understand how to get out of the arrangement if they want to.”