It’s no secret that times are hard for businesses across the country, following a few years of a difficult business landscape. We won’t keep going over the details that you’ve heard before, but numerous businesses have had to go down so many avenues to ensure their future, and many of them have ended up in debt. They needed additional support, and many will still be paying back this financial support. But if you’re in a position where it’s getting too much, where do you turn for financial advice? From a business debt helpline to bank loans and investment, there’s lots of options for financial help.
This blog is a little different from our usual small business advice, but money is an important part of running a successful company. So, if you’re in a position where help might be the best bet for you, we’re here to try and offer you some direction at a time when you may need it most.
The Small Business Debt Landscape
The small business landscape has always been a difficult one to navigate for both new and seasoned business owners. And while the last decade has thrown up its own challenges, businesses have grown and thrived. But many still operate with an amount of debt in the background. This could be business loans, overdrafts or credit cards. These debts aren’t necessarily a bad sign – many businesses use these types of functions to invest in equipment that will improve their business workings to grow. But with this said, according to money.co.uk SME lending grew 12% in 2022 to £64 million. This figure itself isn’t hugely concerning, but the median figure between small businesses with loans is £14,000 per business, which is a large increase (40%) since 2021.
That shows that the landscape is becoming a little more difficult for businesses, who are tackling higher energy costs mixed with their usual day to day demands of running a business. Even more interestingly from money.co.uk’s is that nearly 70% of SMEs stated external finance was used to ease “case flow related” situations. This hints that some payments owed not being paid on time, or issues buying stock before getting payment from customers.
5 Ways Your Business Can Get Help with Money and Debt
Government Support and Grants
The U.K. government offer a variety of forms of financial help, with grants and loans often depending on where you operate from or the industry you’re in. There is a host of useful medium-term loans and grants that can give you a sum of money that can help you safeguard jobs, ease cashflow and generate growth through expansion.
Speak to Creditors
Depending on how much your business is in debt, it may be possible to contact the entities you owe money to and explain your situation. Most creditors will be understanding and have the kind of solutions that allow you to further spread debts across months. Not only will this help you from a financial point of view, but it will also show your creditor that you’re not avoiding the debt. This attitude is one that will be seen as a positive in the short and medium term.
Money Advice Trust
There are plenty of websites and literature that can give you advice on debt and payment. The Money Advice Trust is on hand to help, with the Business Debtline a source of relief and advice for business owners. There’s plenty there to get the help you need and gain advice from experienced money guidance assistants.
A Business Plan and Bank Loans
Depending on what you want money for – whether it’s to pay off bills or aid in growth – bringing an airtight business plan to request a loan could help you take your business to the next level or consolidate debt. Beware though, getting in debt to reduce debt is moving the problem to another place. But with a plan to reduce this over time, it can be a good way to lighten your financial load.
New Investment
Some businesses are in a position to seek new investment by giving away a percentage of their business. This isn’t a solution that works for everybody, but if you have a business idea that you think is likely to grow into something extremely profitable and can show your workings, there are investors that might see you as a worthwhile investment. This way you can reduce debt, gain capital and use this to grow your business into the thing you believe it can be.
How Can You Reduce Everyday Costs?
Helping with debt sometimes takes looking at how your business operates, and how it can reduce costs in the future to ensure you’re spending less, and spending on things you absolutely need to. With that in mind, here are a few ways to reduce everyday costs:
Renegotiate Contracts with Utilities
Depending on your business utilities contract, you might not be on the best deal for you. There’s a good chance that you’ve increased or decreased the amount of energy you use too, so you’ll be able to ensure you’re paying the right amount.
Find a Products Supplier That Can Help
With most businesses there are items you need to buy to keep your company running smoothly. From cleaning products to health and safety items. With Direct365, all of these things are in one place and with some of the best prices on the market. With our experienced staff, we can help you get the best deals, providing your business with a little extra cash to spend elsewhere on your business.
Produce a Cost Analysis
When was the last time you looked at the costs associated with your business? Then little things that turn into a big cost each and every month. These things are often unnecessary, with subscriptions, out of date or unneeded bills and even purchases that don’t help improve your business. Anything you spend money on should be put into a cost analysis and deemed to be essential or non-essential. This way you can cut down non-essential costs when push comes to shove.
For more information on how Direct365 can help you with business essential products, click the call button below and discuss with our team.
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