Sample 1 - Blog #Business OverdraftSample 1 - Blog #Business Overdrafthttps://lololol.zohosites.com/thoughts/tag/Business-OverdraftTue, 13 Aug 2024 11:12:58 -0700http://zoho.com/sites/<![CDATA[How to Review Your Funding Arrangements this Year]]>https://lololol.zohosites.com/thoughts/post/How-to-Review-Your-Funding-Arrangements-this-Year

5 Reasons: Why this is the perfect time to review your funding arrangements

Whether you're a small business owner or someone just starting out in the world of entrepreneurship, reviewing your current funding arrangements can be a daunting task. But it's also something that can be hugely beneficial.

When done correctly, you can make sure that you're getting the most out of your funding and that it's working for you and your business. That's why now is the perfect time to take a look at your funding arrangements - and this blog article will show you why.

Keep reading to find out the top five reasons why you must review your funding arrangements now.

1. You may be able to get better terms

If you've been with your current lender for a while, it's worth checking to see if you can get better terms. This is especially true if your business has grown and changed since you first took out the loan. It's always worth negotiating with your lender - you may be surprised at what you can achieve.

2. Your business has probably changed since you first got funding

It's highly likely that your business has changed in some way since you first got funding. Perhaps you've added new products or services, or expanded into new markets. This means that your funding needs may have changed, too. Reviewing your arrangements now will help you to make sure that your funding is still fit for purpose.

3. Interest rates may have changed

Interest rates are always changing, and this can impact your business in both positive and negative ways. Reviewing your funding arrangements now will help you to make sure that you're getting the best deal possible.

4. You might be able to get a lower rate

As well as looking for better terms, it's also worth checking to see if you can get a lower interest rate. This is especially true if interest rates have fallen since you first took out your loan.

5. You might be able to find a more flexible lender

Flexibility is always important in business, and this is especially true when it comes to funding. You never know when you might need to make a change to your arrangements, so it's always worth having a lender who is willing to be flexible.


This blog article has looked at five of the key reasons why now is the perfect time to review your funding arrangements. Remember, your business is always changing and evolving, so it's important to keep your financing options up-to-date. 

If you need help getting started, why not speak to a business financing expert? They can assess your needs and give you tailored advice on the best way to move forward.


Taking the time to review your funding arrangements can be a valuable exercise for any business owner. 


By doing so, you can make sure that your funding is still fit for purpose and that you're getting the best deal possible. So what are you waiting for? Get started today! Click Get Started Now


#GICCapital #funding #arrangements #review #business #growth #investment #perfecttime

]]>Sun, 08 Jan 2023 00:00:01 -0800<![CDATA[Revolving Credit Facility: What Does it Mean for UK Small Businesses?]]>https://lololol.zohosites.com/thoughts/post/Revolving-Credit-Facility-What-Does-it-Mean-for-UK-Small-Businesses

One way to finance expansion working capital requirements

In business, cash flow is king. A Revolving Credit Facility (RCF) is a flexible and affordable way to make sure your business always has the cash it needs to keep things ticking over. In this post, we'll take a look at what an RCF is, how it works, and how it can benefit your business.

An RCF is a type of business loan that allows you to borrow money up to a certain limit and then repay it over an agreed period of time. The big advantage of an RCF is that you only pay interest on the money you actually borrow, and you can re-borrow any money you have repaid, up to your credit limit. This makes an RCF an ideal way to manage your business cash flow, as you only pay for the money you use, when you use it.

There are a few different things to consider when taking out an RCF, such as the interest rate, repayment terms, and whether you want a secured or unsecured loan.

However, as long as you compare the different options available and find the right fit for your business, an RCF can be a great way to help you manage your cash flow. 

How does a revolving credit facility work?

Whether you want a secured or unsecured loan. A revolving credit facility is a type of credit arrangement where the borrower can use and reuse the facility, up to an agreed limit. The unused portion of the facility can be drawn down as and when needed, as long as the limit is not exceeded. 

With a revolving credit facility, the interest is calculated on the outstanding balance, meaning that the monthly repayment amount can go up or down depending on how much of the facility is used.

There are two main types of revolving credit facilities - those with a fixed interest rate and those with a variable interest rate.
  • Fixed interest rates will mean that the monthly repayments will stay the same, regardless of how much of the facility is used.
  • Variable interest rates will mean that the monthly repayments will fluctuate, depending on the interest rate at the time.

How can a revolving credit facility benefit your business?

There are a number of benefits to using a revolving credit facility. 
  • One is that it can provide a source of emergency funding. If an unexpected expense arises, the borrower can draw on the facility to cover the cost. 
  • Another benefit is that it can help to improve cash flow. By having a source of funding that can be tapped into as and when needed, the borrower can better manage their cash flow. 

There are also some drawbacks to using a revolving credit facility. One is that it can be easy to get into the habit of using the facility to cover everyday expenses, rather than saving for them. This can lead to the borrower accumulating debt and interest charges. 

Another drawback is that the interest rate on a revolving credit facility is usually higher than other types of credit, such as a business loan.


Overall, a revolving credit facility can be a useful tool for businesses and individuals, but it is important to be aware of the risks and costs associated with it.

How does your business qualify for a revolving credit facility?

There are a few things that lenders will generally look for when considering whether or not to approve a business for a revolving line of credit.

The business will need to have been in operation for at least one year, and it will need to have a good history of financial management. The business will also need to have a strong business model and a solid plan for using the line of credit. Lenders will also want to see that the business has a good credit history. They will want to see that the business has a good track record of making payments on time and that it has a low level of debt. Lenders will want to see that the business has a clear purpose for taking out the loan and that it has a plan for repaying the debt. The business should also be able to demonstrate that it has the financial resources to repay the loan.
]]>Mon, 14 Nov 2022 01:14:39 -0800<![CDATA[Financial statements—what they are and why you need them]]>https://lololol.zohosites.com/thoughts/post/Financial-statements—what-they-are-and-why-you-need-them

Learn the Facts About Business Financial Statements

Business requires a basic understanding of financial statements.  The purpose of business financial statements is to provide information about the financial condition and results for an organization.  Financial statements provide information about an organization’s assets, liabilities, income and or retained earnings.

Income Statement (also known and Profit & Loss Statement)

The income statement is one of the most important, as it provides a snapshot of a company's profitability. In this post, we'll take a closer look at what an income statement is, and how it can be used to assess a business's performance.


An income statement, also known as a profit and loss statement, is a financial document that outlines a company's revenues, expenses, and profits over a specific period of time. This information is used to assess a business's financial health and performance.

The income statement can be used to assess a number of different things, such as a company's ability to generate revenue, its operating costs, and its overall profitability.


Additionally, it can be used to compare a company's financial performance over time, or to compare it against other businesses in its industry.

When reading an income statement, it's important to keep in mind that there are a few different ways to measure profitability. The most common metric is net income, which is measured as revenues minus expenses. However, there are other measures of profitability, such as gross margin and operating margin, which can provide additional insights. No matter how you choose to assess it, the income statement is an essential tool for understanding a company's financial health. 


By understanding what an income statement is and how it can be used, you'll be better equipped to make informed decisions about your business.

Balance Sheet

The balance sheet is another financial statement that business owners need to be aware of. The balance sheet provides a snapshot of a company's assets, liabilities, and equity. This information is used to assess a company's financial position.


The balance sheet can be used to assess a number of different things, such as a company's liquidity, its debt-to-equity ratio, and its working capital. Additionally, the balance sheet can be used to compare a company's financial position against other businesses in its industry. By understanding what a balance sheet is and how it can be used, you'll be better equipped to make informed decisions about your business.


In order to make informed decisions about your business, it's important to understand the different types of financial statements. These statements can provide valuable insights into a company's profitability, operating costs, and overall financial health. 


By understanding what each statement is and how it can be used, you'll be better equipped to make informed decisions about your business.

Cash Flow Statement

A cash flow statement is one of the most important financial statements for a business. A cash flow statement tracks all the money flowing in and out of a business. This is important because it allows business owners to see whether they are making or losing money.


There are three types of cash flow:

  • operating,
  • investing, and
  • financing.

Operating cash flow is the most important, because it shows whether a business is generating enough cash to pay for its day-to-day expenses.

Investing cash flow is important for businesses that are looking to grow, because it shows how much money is being reinvested back into the business.

Financing cash flow is important for businesses that have debt, because it shows how much money is being used to pay off debts.

Why are business financial statements important to understand?

Financial statements are important to understand for a variety of reasons. 


Firstly, they provide insights into a company's overall financial health. This is important for both shareholders and creditors, as it gives them an indication of whether or not the company is a good investment. 


Secondly, financial statements can be used to identify trends and make predictions about a company's future performance. This is important for managers, as it allows them to make informed decisions about where to allocate resources. 


Finally, financial statements are also a useful tool for tax purposes. They can be used to calculate a company's tax liability and to determine whether or not it is eligible for certain tax breaks.

Business Lending: How to banks use financial statements for business credit assessment?

Banks use financial statements to get a clear picture of a business's financial health. This information helps them determine whether or not a business is a good candidate for a loan.


The first step in credit assessment is to examine the business's balance sheet. This document provides a snapshot of the business's assets, liabilities, and equity. The goal is to identify any red flags that could indicate financial problems.


Next, banks will look at the business's income statement. This document shows how much revenue the business has generated and what expenses it has incurred. This information helps banks determine if the business is generating enough cash to repay a loan.


Finally, banks will review the business's cash flow statement. This document shows how much cash the business has on hand and how it is being used. This information helps banks determine if the business has the financial resources to repay a loan.


By carefully reviewing a business's financial statements, banks can get a clear picture of the business's financial health. This information helps them determine whether or not a business is a good candidate for a business loan, business overdraft, revolving credit facility, term loan or commercial mortgage.

]]>Tue, 08 Nov 2022 22:07:45 -0800<![CDATA[The Best Lending Options for Your Business]]>https://lololol.zohosites.com/thoughts/post/The-Best-Lending-Options-for-Your-Business

Business Funding Options Explained

The type of business lending facility you choose can have a big impact on your business. In this blog post, we'll explore the different types of business lending facilities available, and help you choose the best one for your business.

There are various forms of lending facility, and the facility selected should be appropriate to the borrower’s requirements and circumstances.

Lending to businesses takes one of three general forms:

  • a bank overdraft.
  • a revolving line of credit, often known as a revolving credit facility.
  • a term loan or commercial mortgage.

Each form of lending has its own advantages and disadvantages, so it’s important to choose the right one for your business. Let’s take a closer look at each:


Bank Overdraft

A bank overdraft is a temporary borrowing arrangement that allows you to dip into your account when you need to, up to an agreed limit. This can be a useful way to manage your cash flow, as you only pay interest on the money you use. However, an overdraft is a short-term solution, and you may be charged fees if you go over your limit. Additionally, your bank may call in your overdraft at any time, which could leave your business in a difficult financial position.

Summary: overdraft features

  • A bank may agree to provide a customer with an overdraft facility, up to a stated amount (overdraft limit), for a stated period of time. The overdraft is repayable on demand.
  • An overdraft facility may be renewed when it expires; there is no formal repayment plan.
  • The facility operates through the borrower’s current account.
  • An arrangement fee is normally charged by the lender on agreement of the overdraft facility, and then annually on renewal of the facility.
  • Interest is charged on the daily overdrawn balance on the account.
  • The rate of interest payable on an arranged overdraft is subject to negotiation between the parties, and it is usually set out in an overdraft facility letter from the bank to the customer.
  • Interest is payable only on the overdraft balance, not on the total amount of the overdraft facility. A customer with an overdraft facility whose current account is in credit will therefore not pay any interest, so long as the account remains in credit.
  • A customer may repay an overdraft without giving notice. This differs from a term loan, where the customer may terminate the loan early but usually only by giving notice to the bank, and possibly also on payment of a pre-payment fee.

Revolving Credit Facility

A revolving credit facility is a form of lending that allows you to borrow money up to an agreed limit, and then repay it over time, with interest. This can be a flexible way to manage your cash flow, as you can repay the loan as and when you have the money available. However, you may be charged fees for using the facility, and the interest rate may be higher than for other forms of lending. Additionally, the lender may reduce your credit limit at any time,which could leave your business in a difficult financial position.

A revolving credit is similar in many ways to a bank overdraft, but:

* It is managed through a separate loan account and not the borrower’s ordinary bank account; and
* The borrower makes continual use of some of the facility, so that the balance on the account never becomes positive.


A revolving line of credit is also agreed for a given period, during which the borrower can draw on funds up to the agreed limit. Unlike a bank overdraft, the bank is committed to making the funds available throughout the term of the lending agreement.

Revolving lines of credit may be provided to businesses to finance working capital. As a business spends and receives cash, its working capital fluctuates in amount and its net cash flows vary. As a result, its need to borrow changes continually.


Term Loan or Commercial Mortgage

- Term Loan

A term loan is a form of lending that allows you to borrow a lump sum of money over a fixed period of time, usually at a fixed interest rate. This can be a useful way to finance a major purchase or investment, as you know exactly how much you will need to repay each month. However, if you miss a payment, you may be charged fees, and your interest rate may increase. Additionally, the lender may require you to provide collateral, such as your home, to secure the loan.

- Commercial Mortgage

A commercial mortgage is a form of lending that allows you to borrow money to buy a commercial property. This can be a useful way to finance your business, as you can use the property as security for the loan. However, you may be charged fees for using the facility, and the interest rate may be higher than for other forms of lending. Additionally, the lender may require you to provide collateral, such as your home, to secure the loan.


Other options

Other lending options may be preferred in some situations. For SMEs, these options include asset leasing and factoring of trade receivables.

  • Asset leasing

    a borrower (lessee) acquires the possession and use of an asset from a lender (lessor) for an agreed period, often several years. A leased asset for a business is a fixed asset, such as a car or truck. The lessor is a finance company (perhaps a subsidiary company of a bank), another finance leasing company, or the manufacturer of the leased asset. The lessee has possession and use of the asset but makes regular payments to the lessor, who remains the legal owner of the asset (although the lessee may have an option to purchase the asset at the end of the lease term). Asset leasing therefore involves acquiring and using a fixed asset without purchasing it, but instead making a series of payments to the lessor over the term of the lease agreement.

  • Factoring (or invoice discounting) of trade receivables:

    a specialist debt-factoring company (which may be a subsidiary company of a bank) takes over collection of the trade receivables for a client and lends money to the client against the security of future cash income from eventual receipt of payments by the client’s credit customers. Factoring is a specialist form of secured financing of working capital (trade receivables). With invoice discounting, the borrower retains the responsibility of collecting the monies due from their customer.

Purpose of security

A decision to lend to a business customer should be based on the borrower’s expected ability to repay out of the net cash inflows from business operations. Security should not be seen as the probable source of repayment (unless sale of that asset is the means of repayment, such as a property bridging loan).

 

Which Lending Facility is Right for Your Business?

The right lending facility for your business will depend on your individual circumstances. If you need a short-term solution to manage your cash flow, an overdraft or revolving credit facility may be the right choice. However, if you are looking to finance a major purchase or investment, a term loan or commercial mortgage may be a better option. Be sure to speak to GIC Capital advisers to discuss your options and find the right solution for your business.

Finance is needed for working capital because a business must incur and pay for expenditures before it receives money from sales to customers.


Take the stress out of managing cash flow and focus on running your business...
]]>Mon, 08 Aug 2022 02:15:00 -0800<![CDATA[Finance options for small businesses]]>https://lololol.zohosites.com/thoughts/post/Finance-options-for-small-businesses

This piece explains how to raise capital for your business.

Raising capital for your small business can be one of the most difficult and stressful parts of owning a business. It's time-consuming, often involves costly fees, and you may not get the money when you need it. But with the right advice, you can find the right financing option for your business.

There are a few things to consider before taking out a business loan, such as how much money you need, the length of time you need it for, and your creditworthiness. With that being said, below are different ways to finance your business or types of loan facilities:

Business loans

One of the easiest ways to raise money for your business is with a business loan from a bank or other financial institution. However, this depends on how much money you need, how long you need it for, and what your creditworthiness is like. There are three main types of business loans:

Commercial loans – this is a type of loan that's commonly used by large businesses, such as restaurants or retail stores, for short-term growth. They generally involve larger amounts of money over longer periods of time.

Equity financing

Another option for raising money for your business is equity financing, which is when you sell a stake in your business in exchange for funding. This can be a great option if you don't want to take on debt or if you need a large amount of money. However, it does involve giving up some control of your business, so it's important to weigh the pros and cons before deciding if this is the right option for you.

Crowdfunding

Crowdfunding is when you raise money from a large group of people, typically through an online platform like Kickstarter or Indiegogo. This can be a great way to raise money, especially if you have a strong online presence. However, it can be difficult to reach your goal, and there's no guarantee that you'll get the money even if you do reach your goal. 

Asset Finance

Asset finance is a way of funding the purchase of assets using debt. This can be done either by taking out a loan or by leasing the asset. Asset finance can be used to fund both personal and business assets.

There are many benefits to using asset finance, including the ability to spread the cost of an asset over its useful life, freeing up capital for other purposes and potentially reducing the amount of tax payable.

Asset finance can be used to fund a wide range of assets, including vehicles, machinery, equipment and property. In some cases, it may also be possible to use asset finance to refinance existing assets.

Alternative Business Overdraft

An alternative business overdraft is a type of financing that can provide your business with the working capital it needs to cover unexpected expenses or opportunities. With an alternative business overdraft, you can borrow up to a predetermined amount at a competitive interest rate and repayment terms that work for your business.

if your business is in need of quick funding to cover an unforeseen expense or opportunity, then an alternative business overdraft may be the right solution for you. With an alternative business overdraft, you can get the funds you need quickly and at a competitive interest rate, making it easy to manage your finances and keep your business running smoothly.

Invoice Factoring

Invoice factoring is the process of selling your unpaid invoices to a third-party company in exchange for immediate payment. This can be a useful option if you're struggling to make ends meet and need cash flow fast.

The main benefit of invoice factoring is that it can give you access to much-needed capital quickly and without going through the traditional lending process. This can be a major advantage if you have bad credit or are otherwise unable to qualify for a loan.

There are some disadvantages to invoice factoring, however. One is that it can be quite expensive, as most companies will charge fees for their services. Another is that by selling your invoices, you're essentially giving up control over when you get paid – the factor will typically collect payments from your customers on your behalf and then send you the funds less their fees.

 

Get the money you need to help your business grow today, call us on 0203 2909019

]]>Mon, 09 May 2022 22:00:00 -0800<![CDATA[GIC Capital Launches Business Overdraft Service]]>https://lololol.zohosites.com/thoughts/post/GIC-Capital-Launches-Business-Overdraft-Service

Here at GIC Capital, we've launched a new service for firms seeking a business overdraft. 


The new addition will allow us to put our extensive business finance experience to use in a new field – matching ambitious companies seeking a new line of working capital with a vetted business overdraft lender. Mindful of the fact that many small businesses often rely on an overdraft function to help them achieve their growth objectives and alleviate cashflow issues, this service is tailored and fully personalised. 


We fully appreciate how difficult running a small business can be and know that sometimes, an overdraft is an invaluable lifeline. However, it’s not always easy to work out which product is the most suitable. Our new service is designed so that we can match businesses looking to get an overdraft facility in place with an experienced lender – one that truly understands the challenges and opportunities faced by small businesses in the current economic landscape.


The business overdraft service delivers a carefully vetted and highly flexible line of credit to the SME business owner, particularly those with ambitious growth forecasts. GIC Capital takes the role of impartial expert advisor, guiding the business to the most suitable facility. 


We’re passionate about helping small businesses seize every opportunity that comes their way and whether that means having more cash available to pour into a marketing campaign or immediate funds to purchase new inventory, we want to make that happen. Millions of businesses put off the search for a business overdraft because it can seem daunting or, they’ll turn to their regular bank or lender rather than research other options. Often, shopping around and taking a more detailed view of the marketplace can lead to a better deal – or at least peace of mind that the facility being offered by the usual bank is the most appropriate agreement for that business.


Our dedicated team works in collaboration with the borrower to streamline the process of getting a business overdraft facility set up. The entire process has been developed to be quick and stress free for the busy business owner. To get started, the borrower is asked to complete a single form online. An experienced GIC Capital team member is on hand to offer advice and smooth the pathway from initial enquiry to the overdraft function being made available. 


To ensure a frictionless experience, we work only with lenders that adhere to clear and transparent codes of practice, especially with regards to considerations such as the interest rate to be paid on the overdraft. 


Any business owner or director over the age of 18 is able to take advantage of the new GIC Capital service and, funds are made quickly available via a direct bank transfer or through means of a prepaid Business Plus MasterCard. This immediacy of funds means the overdraft can be put to work right away to benefit the small business concerned, helping to smooth out cashflow blips before they become a bigger problem. 


We aim to deliver much needed capital to start-ups and SMEs

Call Now +44 (0) 203 2909019

]]>Sat, 13 Oct 2018 01:40:54 -0800<![CDATA[What are the different SME finance options available?]]>https://lololol.zohosites.com/thoughts/post/What-are-the-different-SME-finance-options-available

One of the biggest questions you’ll face as the owner of a small or medium-sized enterprise is how to finance your business. This isn’t because there aren’t any ways to do so, however. In fact, there are a huge range of finance options available for SME owners to take advantage of, so much so that the challenge presents itself when trying to decide which one to pick! It’s for this reason we’ve written this guide to help you weigh up the pros and cons of each financing method to ensure you pick the right finance option for you.


Crowdfunding


One finance option that’s seen an explosion in popularity over recent years is crowdfunding. Pages such as GoFundMe allow you to put up your business model online and request for donations from the public. In return, you’ll give them free products or services. If you’ve got a popular idea this can be a great way to raise start-up capital fast, but has the downside of lessened profit once you’ve started producing due to the people you’ll have to pay back.


Retail Overdraft Facility


We’ve created our £500K Retail Overdraft Facility service to give your SME a capital injection without the arduous red-tape restrictions. Sounds good already, right? £500K Retail Overdraft Facility works by having you pay back a percentage of what you earn rather than being tied to an inflexible monthly payment obligation that can often damage your cashflow during a tough month of business. By choosing us, you’ll only pay back large amounts if you’re making large amounts, making this a great financing option for SMEs which have a fluctuating number of card payments such as retail or hospitality ventures. 


Business Overdraft Facility


Another financing option we offer that makes life much easier for SME owners is our £2M Business Overdraft Facility. This works exactly the same as a traditional bank overdraft does; we’ll give you access to a wealth of funding when you need it, with plenty of room to manoeuvre when it comes to repayment. 


Our expert team have carefully selected the most clean and transparent lenders for our £2M Business Overdraft Facility, meaning you won’t be faced by sudden charges or out-of-the-blue interest rates that are the case with some banks. There’s no long-term commitment either; we’re here to help you, and are more than happy to take your repayment at a time which suits both you and your business. 


Visit our £500K Retail Overdraft Facility section on our website to find out more. 

We aim to deliver much needed capital to start-ups and SMEs

Call Now +44 (0) 203 2909019

]]>Wed, 03 Jan 2018 00:00:00 -0800