Corporate Finance Associates Blog

The funding opportunities open to Business to Consumer (B-C) businesses have always been extremely limited and the choice has often been the bank or nothing, utilising an overdraft facility.  Not anymore.

As so many businesses have found to their cost the whole concept of an overdraft is that it is an ‘at call’ facility, in other words if the bank wants it reduced or repaid, that is tough, that is what you will have to do, and as banks traditionally tend to look at where your business has been, as opposed to where it is going this can be somewhat limiting.

Businesses that issue trade invoices and expect to be paid on those invoices within, 30, 60, 90 or 120 days do have a solution namely factoring and invoice discounting and we are often asked for our support here and this is a relatively flexible alternative to your bank, because as the business grows, and a lot are, the facility can grow with you.  B-C businesses haven’t up to now had that luxury.

The solution, well for those B-C businesses that utilise  a card processing machine to handle the debit and credit card sales they are making, they can now raise funds against future sales, based broadly on an average of their card sales for the previous 12 -18 months, so not a facility for a start up business but a fantastic solution to those that have been established for a while.

The beauty lies in the ability to repay the facility from future card sales at a rate that relates to the amount that is being processed, so if your business has seasonal highs and lows, the repayments which are a percentage of the total takings mirror these peaks and troughs.

What’s more the business can use the proceeds for anything they want but normally this is currently being used to enhance the business, buy more stock, refurbish premises, run an ad campaign and so on.

So if you know or indeed run a business dealing with the general public where credit and debit card sales are a reasonable portion of your turnover, why not check out this alternative.  There are no lengthy assessments, financials or forecasts required, and the money could be in your bank account within 2 weeks.

Give us a call if you would benefit from further details or an assessment as to whether your business meets the criteria, on 01584 781601 or visit our contact page click the ‘Card Sales Funding’ category and add any extra information the note box on the form and we will get back to you.