At Saint, we understand that going for financing can be a difficult experience, that’s why we partnered with Swoop Funding who make the process as simple as it can be. We are working with Swoop to help provide our clients access to a wide range of lenders, equity investors and government grant agencies. We can also help you unlock cash by cutting costs for banking, utilities and other services.
As an introduction to funding here are some of the key phrases and acronyms commonly used so you know what the specialist terminology means!
Short-term loan – This is usually lasting up to a year or even 18 months. This is something that is offered to companies that don’t offer a line of credit.
Long-term loan – This can last from anywhere between 3 to 30 years. Long term loans require monthly or quarterly payments.
Intermediate-term loan – These generally run for more than one but less than 3 years. The payments are made in monthly instalments.
Balloon Loans – It can be a shorter long-term and intermediate-term loans that come with a final 'large' payment which swells or “balloons” as a larger amount than previous ones.
Invoice finance – This allows you to borrow money against the amounts invoiced to your customers. This is useful for when you have customers who take a long time to pay you and cashflow is a necessity.
Supplier Finance – They provide businesses with credit to buy goods from their suppliers.
Order Finance – This involves the lender paying the supplier of a company for goods that have been ordered to fulfil a job for a customer. Basically put, it is an advance covering some, or all, of the order placed.
Asset Finance - This is a type of business funding used to access the equipment, machinery and vehicles a company needs, without having to find the money upfront. Businesses can use Asset Finance to release cash in the value of their current assets.
Working Capital Loan - Is a short-term loan that is taken to finance a company's every days operations such as wages or rent. The loan is not used for long term investments, is instead to cover the short term operational needs of the business.
Retail Finance - Rather than leaving the customer to find external finance, the retailer is offering credit at the point of purchase by allowing stage payments or credit facilities to suitable creditworthy customers allowing them to pay for a product over the course of a set number of months at no extra cost.
IP Finance - Allows knowledge-intensive businesses to get debt facilities in place against the value of their Intellectual Property such as trade marks, design rights, patents and copyright).
Merchant Financing - Is a cash advance on debit or credit card sales. It’s a form of unsecured business financing for retailers and other consumer-facing sectors, such as restaurants and online businesses.
SEIS – Seed Enterprise Investment Scheme – A government scheme which aims to support, early stage (seed) companies which often have difficulty accessing equity finance. It gives tax relief for investors to be able to invest in young businesses under two years old.
EIS – Enterprise Investment Scheme – A government scheme encourages individuals to invest into certain companies by giving them income tax relief on the amount invested. Investors receive tax reliefs to be able to invest in young growing businesses over two years old.
VCT – Venture Capital Trusts – An investor will receive tax relief on investments in a qualifying VCT. A VCT is listed company which invest mainly in smaller companies that are not quoted on stock exchanges, typcially very small companies which are look for further investment to develop their business.
This is a small overview of the commonly used terms you will see surrounding business funding. If you would like any more information about the funding options available to you just drop us a message as firstname.lastname@example.org and we will be happy to help.
This article was written for Saint Financial Group, a multidisciplinary group based in the UK that helps small businesses develop and grow. SaintFG offers a range of quality solutions in supporting businesses.
Saint provides the luxury of free business consultancy for of our clients, call now for your free consultation with a friendly business advisor to discuss your burning questions and put that energy back into your business!
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