The anatomy of small business finance

Business finance, including both asset and invoice finance, is a valuable resource for any small business. Let’s explore how this can have an impact on some of the most common business sectors:

Manufacturing – the most important elements of any manufacturing business are its people and its machinery. The manufacturing process must be efficient with minimum downtime to ensure delivery times are optimised. This can only happen if staffing numbers are consistent and they have access to good quality equipment, both of which require significant investment. Of course, in addition, there is also the cost associated with the purchase and ongoing maintenance of the commercial property. Business finance solutions such as asset finance, invoice finance and commercial mortgages are all beneficial for manufacturing businesses.

Health & Medical – companies such as dentists, chiropractors, massage therapists and hygienists often struggle to finance the day-to-day equipment needed to successfully run their practices. Alongside this the day to day running costs and items such as professional indemnity insurance can be incredibly high. Being able to utilise business finance to maintain a healthy level of cashflow and cover all the necessary expenditure is vital to their ongoing success.

Construction – operating in this sector demands a high level of cash. You must be able to fund both temporary and permanent staff whilst also purchasing supplies, raw materials and operating equipment. From the outset of any new construction project the drain on cash can be overwhelming especially as project completion is often over 12 months and therefore incoming revenue only occurs on completion of the project. Having access to asset finance for the purchase of machinery and invoice finance for the boost in cash ensures the long-term future of a construction firm.

Food & Retail – arguably some of the most demanding sectors, both food and retail are incredibly competitive. A business needs to have large stock levels, good capacity measures to accommodate for excessively busy periods and sufficient staffing numbers. Alongside this is the cost of a commercial building fully kitted out with state-of-the-art equipment and furniture to create a welcome and warm space for all customers. Asset finance and commercial property funding are the most popular funding methods for these industries.

Leisure & Hospitality – the 2 vital elements are people and property, without both there is no viable business. On top of this equipment, insurances and facilities all need regular investment. Often within these sectors there is a famine and feast scenario where for certain times of the year business is at capacity and at other times it can be a struggle. This is where a consistent level of cashflow across the financial year is so important.

In summary, no matter what the industry and no matter what the specific business need there is a financial solution for every requirement. Whether it is working capital, funding of new staff, boosting cashflow or covering an income shortfall while invoices are settled the anatomy of small business finance means that every eventuality can be covered.

If you would like help with any forms of business finance, then our team would be delighted to help. To find out more please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.