GUEST BLOG: Five ways to raise cash without calling the bank

By Keith Tully, business insolvency expert and partner, Real Business Rescue

It is no secret that banks have become largely reluctant to lend money to companies and particularly small and medium-sized businesses in recent years.

So much so in fact that the UK government has been encouraging banks and other mainstream lenders to explain to their rejected credit applicants where they might find alternative sources of finance.

So what are these alternative sources of finance for SMBs? Well, here are a few you might not know about:

1. Invoice finance

Invoice finance is a means through which a company can effectively sell their invoices to third parties for a fee in exchange for upfront access to cash.

It isn’t necessarily ideal for a company to lose out on a certain percentage of money they are entitled to but, where time is of the essence, invoice factoring and discounting can be an absolutely invaluable mechanism for overcoming cash flow difficulties.

2. Asset-based financing

If your business is finding it particularly difficult to access the kind of loan or credit deals that you require it can be frustrating. But it is worth being aware of the asset-based financing options that are available.

These solutions essentially allow a company to secure loans by using some of their more valuable assets as backing in support of their loan applications.

3. Asset refinancing

Another alternative that has very significant potential as a route to financing for any number of different SMBs is asset refinancing. This process allows a business to sell some of its most valuable assets, such as heavy machinery or a fleet of vehicles, for example, and then to hire them back.

Again, these kinds of solutions might not be considered ideal because a company will usually want to retain ownership of its key assets, but if cash flows are tight and creditors are closing in, they can represent a priceless financial lifeline that allows a business to stay afloat.

Another alternative that has very significant potential as a route to financing for any number of different SMBs is asset refinancing

4. Merchant cash advances

If you are operating a business that generates revenues through lots of repeated sales made through credit or debit card terminals then you may be able to secure what are called merchant cash advances.

These are essentially loans issued to small businesses such as independent retailers, restaurants and bars, with repayments made as a percentage of revenues within a specified period.

5. Fast business loans

Because banks and other mainstream lenders have retreated from the small business loan arena to a large extent since 2008, newly created alternative loan providers have seen their opportunity and stepped into the breach.

So there are now lots of well-established and highly regarded providers of business loans that can be accessed very quickly where the details can be agreed. Interest rates vary but there is a growing number of specialist service providers offering credit to quality companies in a wide range of different industries.

Whatever form of finance you feel might suit the needs of your business best, it is always important to research your options as fully as possible and to understand precisely the terms under which you are taking on any kind of loan, credit or refinancing deal. If you are unsure of how best to proceed or you want to be sure that you’re making the right choices then you should speak directly to an expert on the subject as early in the process as possible.