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• 28 Dec

  Finding Finance For A Struggling Business

  Finding finance for a struggling business can be tough but at FundInvoice we have plenty of options available for any company that is struggling.

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  Below is more detail about the options that may be available to you if your company is in trouble.

  Finding Finance For A Struggling Business

  

  How to Secure Funding for a Struggling Business

  Running a business can be a rewarding but challenging journey, and sometimes even the most well-prepared companies face financial difficulties. If you find your business struggling financially, securing the right type of funding could provide the lifeline needed to stabilise operations and plan for recovery. In this article, we explore practical and effective ways to find finance for a struggling business.

  Assess Your Financial Needs

  Before seeking funding, it’s crucial to understand your financial situation clearly. Start by reviewing your cash flow, liabilities, and outstanding receivables.

  For help see our material on How To Write A Cash Flow Improvement Plan.

  Identify the root causes of the financial struggles. Do they stem from declining sales, unexpected expenses, or delayed customer payments? By pinpointing the issue, you can identify remedial steps but also determine the exact amount of funding you need and how it will be used.

  For help with the steps to rescue a struggling business see our Business Turnaround Guide.

  Where to Find Funding for a Business in Trouble

  If you have financial struggles traditional sources of financing may not be so readily available. For instance, banks may not be so willing to offer an overdraft or provide a business loan. Often they will look for stable finances as a pre-cursor to lending.

  There are a growing number of alternative finance options that are likely to be available to a UK company that is struggling.

  Consider Invoice Finance

  If your business is struggling due to cash flow issues caused by delayed customer payments, invoice finance could be one solution. This type of financing allows you to unlock the value of your unpaid invoices, providing immediate cash to cover operational costs.

  One particular product within that product umbrella is turnaround factoring which is very likely to be available to companies in financial trouble. It is designed to help them on the road to recovery.

  Government Support

  The UK Government has launched an online Artificial Intelligence AI chat service which you could try. You can use that tool to access any help that may be available.

  Speak to Your Existing Lenders

  If you have existing loans or credit facilities, reaching out to your lenders can sometimes yield positive results. Many lenders are open to restructuring repayment terms or providing additional lines of credit to help businesses navigate tough times. Open communication and a clear recovery plan can demonstrate your commitment and increase your chances of receiving support.

  Seek Specialist Support

  If navigating the financing landscape feels overwhelming, consulting with a business finance broker can make the process more manageable. Brokers specialise in connecting businesses with the right funding partners and can help identify options tailored to your circumstances. They can also negotiate on your behalf, potentially securing better terms.

  Emergency Finance Solutions for Small Businesses

  Solutions such as factoring can be made available to all sizes of business including small businesses. In some cases you can selectively choose the invoices you want funded to avoid any ongoing obligation. However, if you are struggling financially you may want to maximise your funding levels.

  Strengthen Your Business Case

  When applying for finance, it’s essential to present a strong business case. Prepare detailed financial projections, explain how the funds will be used, and outline your plans for recovery. Showing lenders or investors that you have a clear strategy can instil confidence and improve your chances of securing funding.

  Negotiate With Suppliers

  Another often overlooked option is negotiating with your suppliers. If your struggles are temporary, many suppliers are willing to extend payment terms or offer discounts for early payments. This can free up cash flow and provide breathing room while you seek additional funding.

  For more ideas see our article on Solving Cash Flow Problems.

  Prevent Future Financial Struggles

  While finding finance can solve immediate problems, it’s also essential to address the underlying causes of your business’s struggles. Implement robust financial management practices, diversify income streams, or consider investing in tools that provide better cash flow forecasting. Learning from the current situation can help prevent similar challenges in the future.

  Summary Of The Finance Options For A Struggling Business

  Finding finance for a struggling business requires a proactive approach and a clear understanding of your options. By exploring avenues such as invoice finance and alternative funding solutions, you can secure the resources needed to stabilise and rebuild your business. Remember, acting quickly and seeking expert support can make all the difference when navigating tough times.

  By Glenn Blackman