It’s All About The Money: Financing Solutions For SMEs

Written by Chloe Harwood

When it comes to business cliches, few ring as true as the old chestnut “it takes money to make money”. In a fast-paced, global business climate small-to-medium sized enterprises find themselves stepping into the commercial ring with huge multinational titans. In order to stand a chance in this David versus Goliath dynamic, smaller businesses need to stay agile and take golden opportunities for growth and advancement as quickly as they arise. 

This can be difficult in times of poor cash flow or bad personal and business credit. Fortunately, today’s small business has a plethora of options to help them mobilize even when cash reserves are low and credit options are limited.

Cash is king

Liquidity is essential to ensuring the growth and ongoing prosperity of your business. Liquidity is the key to allowing your business to make prudent investments that will allow it to evolve. Whether it’s through purchasing a new piece of equipment that will allow you to reduce workload and increase output and productivity, investing in a bulk order of discounted stock that will lead to steady long-term profits or hiring talented and dedicated employees with the knowledge and expertise to take your business to the next level, small businesses live or die by their ability to seize these opportunities.

Don’t make the mistake that your current financial circumstances make these strategic investments unattainable. The finance industry offers a diverse range of products to help small businesses through periods of poor liquidity.

Working capital loans

Working capital loans are designed to help businesses to secure the capital to help in day-to-day operations to ensure that their operations can be maintained and staff can be paid on time during periods of austerity. Check out to find out more. They’re intended to be short-term solutions to periods of poor liquidity such as waiting on an unpaid debt or periods of temporary closure.

Bridging finance

Bridging finance is similar to a working capital loan that is another secured, short-term solution that can usually be arranged at short notice, making it a useful solution for when businesses need quick cash to move on an opportunity before it’s snapped up by a competitor. Unlike working capital loans, bridging finance can be extended to businesses and individuals and in the case of bridging loans on a property, they can often be converted into commercial mortgages.

Business credit cards

When it comes to strategically implementing credit cards for businesses, good practice differs little from your household budgeting. While the interest rates on offer will vary wildly depending on your business and personal credit, business credit cards tend to be readily available. The trick lies in being strategic with interest rates, switching the debt from one card to another to avoid overpayments on interest, just like with a household credit card.

Home equity

“Betting the farm” may be an extreme option, but a home equity loan can be a justified calculated risk if you have absolute  confidence in your business and have the numbers to back it up. Just make sure that you’re getting the best possible interest rates so that you’re not leeching too much into your profits.

About the author

Chloe Harwood