Enhance your Cash Flow to support your loan application

Assess and Adjust Payment Terms

One of the first steps in improving cash flow is to assess and adjust payment terms with clients and suppliers:

Receivables

Shorten the payment terms for clients where possible, encouraging quicker payments. Consider offering discounts for early payments to accelerate cash inflows.

Payables

Negotiate longer payment terms with suppliers to delay cash outflows without incurring additional costs. This can help maintain cash on hand for longer periods.

Enhance Invoice Management

Efficient invoice management can significantly impact cash flow:

Prompt Invoicing

Issue invoices immediately upon delivery of goods or completion of services to reduce the time to payment.

Automated Reminders

Use automated systems to remind clients of upcoming or overdue payments, reducing the chances of delayed receivables.

Manage Inventory Efficiently

Inventory management plays a critical role in cash flow management:

Just-in-Time Inventory

Adopt a just-in-time inventory system to reduce holding costs and free up cash that would otherwise be tied up in stock.

Regular Reviews

Conduct regular inventory audits to identify slow-moving or obsolete items that can be discounted or liquidated to free up cash.

Monitor and Forecast Cash Flow

Regular monitoring and forecasting of cash flow allow businesses to anticipate and address potential shortfalls before they become problematic:

Cash Flow Projections

Develop detailed cash flow projections for at least the next 12 months to anticipate the cash needs of the business.

Regular Monitoring

Regularly compare actual cash flows against projections to identify trends and adjust operations as necessary.

Utilise Technology

Leveraging technology can enhance cash flow management through better accuracy and timeliness:

Accounting Software

Implement robust accounting software that provides real-time insights into financials, helping to make informed decisions quickly.

Online Payment Solutions

Encourage clients to pay via online platforms that facilitate faster and more reliable cash inflows.

Build Strong Banking Relationships

Establishing and maintaining good relationships with banks can be beneficial:

Flexible Credit Solutions

Banks are more likely to offer flexible credit solutions and favourable terms to businesses they know and trust.

Advisory Services

Utilise the advisory services many banks offer to help optimise your financial management and planning.

In Summary

Improving cash flow is a multifaceted strategy that involves better receivables and payables management, efficient inventory handling, proactive financial forecasting, and leveraging technology.

By implementing these strategies, SMEs can enhance their financial stability and improve their eligibility for cash flow loans, ultimately supporting their growth and operational goals.

How we can help

At SME Capital, we know all businesses are not the same. So we provide bespoke, long term acquisition finance solutions to UK businesses not one-size-fits all blanket loans.

We exist because we truly believe we provide a better alternative with our custom-made funding solutions for UK businesses to help you grow and succeed.

It’s in our DNA.

We are experts in SME lending, so whatever the loan purpose, our goal is to become your long term funding partner, which is why each bespoke loan will be specially-designed for you.

We can provide the best solution for you, without you giving away control or equity, and help you get on top of your cashflow.

We understand the importance of trusted relationships and have dedicated regional directors based across the UK who will take the time to understand your business, your unique needs specific to you and support you with your business loan application. We enhance our traditional underwriting with data analytics, including timely risk and trend analysis to put you in control of your future.

By breaking down silos typically found in traditional lending organisations, we give you direct access to decision makers, enabling funding in 6–8 weeks.

Get in touch now to discuss funding options

Tailored solutions for SMEs

We understand that SMEs have unique financial circumstances and requirements. Our acquisition finance solutions are specifically tailored to meet the needs of small and medium-sized enterprises:

Fast and Efficient Process: As an alternative lender, we have a streamlined approval process designed to provide you with a quick response. We recognise the importance of agility in seizing acquisition opportunities, ensuring minimal delays.

Flexible Financing Structures: We work closely with you to create financing structures that align with your business goals and financial capabilities. Our solutions can include a combination of debt and equity financing tailored to your specific acquisition.

Considerate Risk Assessment: Unlike traditional lenders, we take a comprehensive view of your business potential beyond just historical financials. Our risk assessment considers your growth prospects, industry position, and the strategic merits of the acquisition, enabling us to provide financing options that suit your business.

Our collaborative approach

At SME Capital, we believe in fostering strong partnerships with our clients. When it comes to acquisition finance, our collaborative approach sets us apart:

Personalised Support: We assign a dedicated team to work closely with you throughout the acquisition finance process. Our experienced professionals provide personalised support, ensuring a deep understanding of your business goals and tailoring our solutions accordingly.

Due Diligence Assistance: We assist you in conducting thorough due diligence on the target company. Our expertise helps you assess financial performance, market position, growth potential, and potential risks, providing valuable insights to inform your acquisition decision.

Access to Network: Our extensive network includes experts in mergers and acquisitions, legal advisors, and industry specialists. We leverage these connections to provide you with holistic guidance and facilitate a smooth acquisition process.

SME Capital uses a cash flow-based approach to lending, offering a multiple of business profitability, specifically EBITDA, as opposed to a loan amount being directly tied to the value of specific assets. We can provide an economic solution to consolidate smaller lenders, or refinance expensive short-term loans, while providing additional working capital for the business.

With repayment terms ranging from 3 to 7 years and flexibility on repayment structures SME Capital is an effective, relationship-led refinance solution for qualifying businesses in any sector that have been trading more than 3 years with £250,000+ EBITDA.

About SME Capital

SME Capital was founded to support the growing number of SMEs who face difficulty or frustration in accessing capital through traditional methods. We understand the importance of real and trusted relationships in the SME lending market and have dedicated Regional Directors based across the UK.

By combining traditional lending expertise with the latest in data analytics, we are supporting established UK SMEs with their long-term objectives and business ambitions.