Business and Economy

Finance help


It doesn't matter whether you are an established business, or just starting out , everyone needs to be in control of their finances. Here are a few tips which might help:-

Managing  your cashflow: Understand exactly what your finances are telling you. Issue invoices promptly and chase up debtors; don't buy more stock than you need; negotiate longer credit terms with suppliers; shorter ones for customers; fill up gaps in your forward order book; and keep in touch with your bank.

When economic conditions deteriorate, small businesses can be the most vulnerable. However, it's not usually lack of profitability that causes their failure – it’s lack of cash. Find a guide to managing your cash flow from the Credit Management Matters website

Cut your costs: Look for savings in every part of your business. Making your business greener isn't just about saving the planet, it's also about saving you money. Do you turn equipment off at night? Is every business journey necessary? Are you taking full advantage of your tax allowances?

Look after your suppliers: Cashflow does not just involve getting money into the business. The other side of the coin is paying money out.  When the economy takes a downturn, your suppliers may want to protect their financial position by:

  • Reducing the amount of trade credit they will advance you
  • Asking for payment more quickly
  • Asking for stage payments or even cash on delivery

To ensure that you are not being squeezed on both sides you need to manage this side of the cashflow equation and remain a low risk for your suppliers. Make sure you know when you are expected to pay – not all suppliers have clear terms and conditions. Pay on time but, if you can’t do so, contact your suppliers to explain why.  

Also, protect your credit rating – don’t wait until the start of court proceedings to pay. Once your credit rating is damaged, you may find it hard to get any credit at all. Try to negotiate longer payment terms if you are finding your customers are taking longer to pay you – if not, see if you can get a discount for prompt payment.

Those are just a few tips - you can also check out Business Link's finance help tool to see where you may need additional advice and support.


Further sources of help


Small Business Rate Relief

Your local council is responsible for the billing and collection of  Business Rates.  The Business Rates collected are paid into a central Government pool and redistributed to local authorities based on population.

You may be entitled to a reduction in your Business Rates if you meet certain criteria.  Many businesses do not realise they are entitled to claim so, if you have a small business, visit the Business Link Rate Relief pages - or contact your local Economic Development Office - to check your eligibility and find out more.

Note: for the financial year 2008/2009, application forms need to be received by 30th September 2009.


Business Debtline

If you are already in debt due to cashflow issues or supplier payment problems, you may wish to visit the Business DebtLine - free, confidential and independent advice on how to deal with debt problems.

Business Debtline is a national telephone helpline for the self-employed and small businesses with debt problems in England, Scotland and Wales. The service is free, confidential and independent and has existed since 1992. Business Debtline is now part of the Money Advice Trust (registered charity no. 1099506).

What does Business Debtline do?  The service provides self-help advice to its callers and also produces written self-help packs and fact sheets to back this up. Expert advice on the full range of debt issues from dealing with tax arrears to avoiding repossession of home and business is offered.

The service can also assist callers with the setting up of debt management plans for England & Wales or Scotland through its sister organisation, National Debtline.  Visit the Business Debtline website for further information.


The Small Firms Loan Guarantee Scheme

Unfortunately, the Small Firms Loan Guarantee has been suspended. The type of lending previously provided under SFLG – to businesses that lack collateral and/or track record – will still be available under the Enterprise Finance Guarantee scheme (see below.) The Government will be bringing forward proposals for a new scheme post March 2010 later this year.


Enterprise Finance Guarantee

Businesses are finding it increasingly hard to access the finance they need, particularly working capital. The Enterprise Finance Guarantee is a Government  scheme which guarantees lending to viable businesses to ensure that they can get the working capital and investment that they need.

This £1.3bn scheme will support bank lending, of 3 months to 10 year maturity, to UK businesses with a turnover of up to £25 million who are currently not easily able to access the finance they need. It will enable them to secure loans of between £1,000 and £1 million through the Government guarantee and is available up to 31 March 2010.   See the BERR Enterprise Finance Guarantee pages for more details.


European Investment Bank

The EIB have announced they will be giving loans to small and medium-sized businesses

Who is eligible for an EIB loan for SMEs?  - all autonomous firms with fewer than 250 employees - subsidiaries and holding companies are not eligible

To finance what?  =- EIB loans for SMEs can support all types of investment or expenditure necessary to grow a small business. Hence, the investment can be:-

  • tangible, i.e. the purchase of plant or real estate. In principle, the purchase of land is ruled out unless it is vital for the investment (while the purchase of agricultural land is totally excluded);

  • intangible, such as the financing of expenditure directly related to research and development, building up or taking over distribution networks, the filing or acquisition of patents or the costs incurred in the transfer of an enterprise enabling the continuation of economic activity (where the buyer and the enterprise up for sale are SMEs and the amount required to finance the transfer does not exceed EUR 1m).

  • the permanent increase in working capital required to develop

For further details, visit the European Investment Bank's SME web pages



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