Is existing business debt affecting your cashflow?

The past 3 years have been incredibly turbulent for the business economy. When Covid first hit back in 2020 they were unprecedented times and nobody could have predicted the effect it would have on everyday life. In order to face up to the challenges, businesses needed to adapt to ensure that they could survive and many took advantage of the Government backed loan schemes such as RLS, CBILS, CLBILS and BBLS.

These initiates were vitally important to businesses who had to close all operations, furlough staff or diversify to enable all employees to work from home. Bills still had to be paid and salaries honoured, which was incredibly tough especially when no revenue was coming in. The need to keep a healthy cashflow was vital to ensure that businesses could continue to trade in such difficult circumstances.

Thankfully, businesses that successfully navigated these challenging times are now looking to fulfil growth plans however, one of the barriers that they face is cashflow. For most they will have historical business debt such as bank loans and commercial mortgages. On top of this will be the outstanding debt owed due to one, or a number of, Government loan schemes. Making it a challenge to manage the debt whilst also running the day-to-day aspects of the business and then fulfil growth plans.

This is where consolidation is so important. By going through a process of debt consolidation a business can see several benefits, two of which are:

1. Monthly costs can be lowered as the total number of business loans can be consolidated in to one and the repayment terms extended.
2. The administrative burden of monitoring and keeping track of multiple loans, along with having to deal with a number of financial providers is eliminated.

When consolidating though, it is important to establish if there are any penalties that could apply on repayment of existing loans. Also, ensure that you understand whether any transaction fees might apply.

With so many options available and choices to be made when consolidating debt, it is always best to speak with a finance broker. They can evaluate your individual business circumstances and find the very best business loan.

If you would like to find out more about debt consolidation, please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.