A term loan provides a business with capital based on a fixed monthly repayment over a period of time. Often used by small companies to purchase assets such as machinery or property.
At Pure we work with our clients to prepare a full three way financial forecast, covering balance sheet, profit and loss and cash flow statement to negotiate term loans (including CBILS & RLS) in order for the business to invest in its growth.
Invoice financing covers both factoring and invoice discounting, both of which are financing arrangements where the business can release capital from unpaid invoices.
When a business raises a sales invoice the banking partner can provide between 60%-95% of the value (including the VAT element) immediately, improving the cash flow position of the business.
Once the sales invoice is paid the provider makes the balance of the invoice available to the business.
Factoring is a disclosed facility, meaning that the customers know that the monitoring and collection of the invoices are managed by a third party. These types of solutions are often utilised by younger businesses as they establish their place in the business world.
Invoice Discounting in contrast is an undisclosed facility, where the end customer is unaware of the invoice provider. This service is for larger more mature businesses and can be across many sectors, including construction.
We work with our clients to establish the best relationships with lenders and ensure there’s a good fit with regards to the facility, fees and support.
Asset based lending covers a number of financial products such as invoice finance, secured debt, asset finance, property finance and stock finance amongst others.
It is the lending of capital secured against the assets within the business, such as invoices and physical plant and machinery.
Asset lending can be on a term loan basis so with a fixed monthly repayment of a specific time period, but could also be linked to seasonal income.
This type of lending can be very effective when looking to restructure a business, make acquisitions, fund a management buyout or acquire new assets to improve operational efficiencies.
Asset finance is used to acquire or refinance existing assets within a business, for example plant and machinery. The facility will be based around an HP agreement, finance lease or operating lease usually for a period of up to 7 years.
Used to fund multiple asset types asset finance can be used to acquire vehicles, machinery, agricultural equipment, manufacturing equipment, production lines, IT systems, yellow goods and more.
Our lenders provide property finance to cover commercial mortgages from £250,000 to over £20m as well as property development projects from a GDV of £1m to over £50m.
The finance can be used to acquire, refinance or build out projects both across residential and commercial properties.
With funding matched to projects our lenders have the ability to provide interest only or capital only loans but also more flexible solutions too.
Mezzanine finance is a complex financial product that is a hybrid of debt, equity and financial instrument. Traditionally used in complex M&A transactions by large corporates, they are being used by smaller entities today.
Similar to venture debt, mezzanine finance is traditionally more expensive than senior debt as it is not secured against a meaningful asset.
Should the business perform, then the finance is paid like any other finance however, the instrument enables the holder of the debt to turn that to an equity holding of the business, potentially acquiring it in full.
Funding the acquisition of a new business can be complex, but there are lenders who are willing and able to support transactions.
The key to acquisition funding is to ensure the business case for the acquisition is sound with strong integrated forecasting (covering profit and loss, balance sheet and cash flow statements) together with realistic sales forecasts.