Category: UK SMEs

Manage Seasonal Fluctuations

In business, seasonal fluctuations refer to the peaks and troughs in demand that correspond with different times of year. Most SMEs will experience this at some point, but certain industries can be subject to greater variations due to the nature of their trade. This is especially important during this time with the coronavirus pandemic effecting most businesses nationwide.

The upside is that these shifts are usually predictable, which allows companies to plan ahead and put measures in place to ensure they can fulfil customer requirements however as people and businesses are now learning, it’s not always that easy. It is prudent to review what your business can do to manage cyclical demand effectively.

Here are a few things you can do to control changes in the economic market.

Manage cash flow

During peak seasons, try to reserve cash for the quieter months so you have sufficient funds available all year round or in times of need. Aim to plan at least six months ahead by using historic sales data to forecast levels of supply and demand, although, cases like this are hard to predict. This will help you to better recognise trends in consumer behaviour and account for this in your sales projections.

Control inventory

Regularly monitoring levels of stock can reduce wastage and therefore save costs. Coincide orders with peak periods, so your company does not have surplus stock when business is slow.  

Identify workforce needs

Establish how many employees you need in any given shift, month or season to maximise efficiency and organise staff contracts to reflect business levels. Employing temporary staff can provide additional support during busier periods and this strategy can also keep costs down during quieter months. This may apply to supermarkets and the NHS during this period when they need as much support as possible.

Review payment terms

Long payment terms and overdue client invoices can put a strain on your cash flow. Requesting shorter credit periods may prompt customers to pay for goods and services quicker, giving you adequate working capital to continue trading.

Fleet management tips for a more efficient fleet

Fleet managers are responsible for employing techniques and processes to help maintain a productive and efficient fleet.

An efficient commercial fleet will get the job done quickly and cost-effectively with minimal hassle. Maintaining an efficient fleet of vehicles is no simple feat though, it is a process that requires constant monitoring and continual improvement.

Use the tips in this blog to reduce running and maintenance costs and increase your fleet’s efficiency.

Service vehicles regularly

Keeping on top of vehicle servicing and maintenance will keep your fleet looking great and running efficiently whilst also helping to prevent costly accidents and breakdowns.

Recruit experienced and professional drivers

Driver behaviour and habits can have a big impact on fuel efficiency and the amount of maintenance a vehicle requires. Only recruit experienced drivers with excellent references and make it a habit to give all drivers regular training and feedback on performance.

Use telematics

Telematics collect data about driver and vehicle performance to help you to monitor driver performance for training purposes. This data should then be regularly reviewed and used to help drivers to adopt safer and more efficient driving techniques.

Invest in the right vehicles

Choosing vehicles that are best suited to your business’ specific requirements will have the biggest impact on your fleet’s efficiency.

Just some of the factors you should pay careful attention to when shopping for a new vehicle are:

  • Size – An unnecessarily large vehicle will waste fuel.
  • Type of journey they suit – Will your vehicles be travelling short or long distances? Some vehicles will be more efficient for short journeys and others for long distance journeys.  
  • Emissions – The more environmentally-friendly your vehicles are, the less tax you will be required to pay.

It’s also important to recognise when updating your fleet is the most cost-effective option.

If you require financial help or advice with updating your commercial fleet, speak to our team here at Richmond Asset Finance by giving us a call on 0113 288 3277. We provide a range of flexible vehicle finance and asset finance services.

How to prepare your commercial fleet for winter

Prepare your fleet of commercial vehicles for the colder weather to keep them running efficiently through the winter months.

Treacherous wet, icy and windy weather can pose significant problems for drivers and fleet managers during the winter.

The key to keeping your fleet operating smoothly during this time is good preparation.


Putting your fleet through a thorough inspection or service prior to the cold weather kicking in can help to pick up any problems or damage to the vehicles. Making sure your fleet is in tip-top condition and are all topped up with engine oil and wiper fluid can help to prevent accidents and costly down-time once the bad weather hits.

Inspect tyres

When inspecting your vehicles, be sure to pay careful attention to the condition of the tyres which need to be in excellent condition to manage wet and icy roads. Look out for signs of damage or excessive wear and make sure they are pumped up with enough air.

Winter tyres

Many fleet managers use winter tyres if their fleet are likely to be visiting remote areas frequently. Winter tyres have better grip and can help to reduce the risk of accidents and breakdowns in ice and snow.

Educate drivers

One of the best ways to keep your fleet safe during the winter is to educate your drivers in how to drive in poor weather conditions. Refreshing their knowledge of safe stopping distances and how to adjust their driving for snow and ice can help to minimise breakdowns and accidents.

Emergency packs

Always make sure that your fleet are kitted out with winter survival packs for when they’re out on the road. At minimum, all emergency kits should contain a blanket, de-icer, scraper, torch, high visibility jacket, and extra screen wash.

If you have concerns about the condition or efficiency of any vehicles in your fleet, then it can be a good idea to update them before the winter season. 

If you require financial help or advice with updating your commercial fleet, speak to our team here at Richmond Asset Finance by giving us a call on 0113 288 3277. We provide a range of flexible vehicle finance and asset financeservices.

What is a bridging loan exit strategy?

When taking out a bridging loan you will be required to provide details of your exit strategy, the method by which you will pay back the loan.

Bridging loans are an extremely valuable form of short-term finance that can help businesses to quickly acquire money to cover an expense before credit becomes available to them.

Just some of the reasons that businesses use bridging loans include funding unexpected expenses, paying urgent debts, and investing in time-sensitive business opportunities.

Before rushing in and requesting a bridging loan though it’s very important that you create a plan for paying back the money. This is called your exit strategy.

The price of a poor exit strategy

When you take out a bridging loan you will agree a date by which the debt will be repaid. If you cannot repay the amount by this time you will need to consult with your loan provider about what happens next. 

In some instances, it may be possible to extend the loan, but beware that this is not always the case. A late repayment could end up costing you a considerable amount in renewal costs or late payment penalties, as well as having a negative effect on your credit rating, so it’s wise to ensure that you have a reliable exit strategy in place before going ahead.

Typical exit strategies

Your exit strategy will depend entirely on your business’ unique circumstances and the reason that you required the bridging loan.

A few examples of typical exit strategies include:

  • Selling a property or land
  • Selling debt to a collection agency
  • Selling shares or assets
  • Inheritance
  • Refinancing

For further information about bridging loans,or help and advice with creating a sound exit strategy, get in touch with our team of experts here at Richmond Asset Finance by calling us on 0113 288 3277.

Why Is The Machine Finance Market Growing?

Machines are critical to growth in the manufacturing sector but they are often expensive and can eat into business profits without some form of financial help.

Traditionally business owners turn to the bank to provide straightforward business loans to help if there is insufficient cash in the business to purchase machines. Even if there is enough cash to buy a machine, a loan can be a more sensible way to buy equipment particularly if there is risk attached in making large investments as there often is in business. However, business loans from banks also come at a cost and interest rates can be high.

Having multiple loans can also leave a business vulnerable in a downturn and restrict any cash flow available to grow the business. Machine finance is growing in popularity because it unlocks funding when you need it.

So if your business requires a new machine that will cut down the amount of manual labour required to get jobs done such as a CNC machine, machine finance can help you acquire that machinery at a minimum upfront cost.

This means you get the benefit of improved efficiency and profitability while spreading the cost. It can also be tax efficient now that the government has increased the annual investment allowance. So it comes as no surprise that the machine finance sector has grown 9% year on year.

Machine Finance Sector Up 9%

Any thoughts of the manufacturing sector being hit by the uncertainty around Britain leaving the EU Certainly hasn’t been felt in the machinery finance sector where growth has hit 9% compared to the previous year.

Analysts say the UK asset finance market as a whole look set for a record period of growth in 2019 on the back of a broadly stable 2018. Last year saw a mixed pattern of growth in some sectors and declines in others. IT asset finance for example saw a fall of 32% while other sectors such as machinery and business equipment finances saw increases, the latter seeing 8% growth in the same period.

Machinery finance may well see further year on year growth in 2019 if manufacturing receives a boost and more business owners take advantage of the temporary tax benefits that will come as a result of taking advantage of new Annual Investment Allowance limits.

Machine finance can be particularly useful for investing factory machinery such as CNC machines, which can be expensive to purchase outright. Machine finance provides a way of investing in machinery without having to risk huge amounts of money which can be better used in expanding business operations, research end development.

Asset Finance New Business Rises 9%

According to the most recent figures released by Finance & Leasing Association (FLA) new business in the asset finance sector increased by 9% year on year in the month of October. This indicates that Brexit uncertainty hasn’t put off firms looking to use asset finance to grow and develop their businesses.

With asset finance covering several sectors, some areas have shown even more spectacular growth than the overall figure suggests. Machinery finance for example showed growth of 16% compared to October 2017 while business equipment finance was up 29% which is nearly one third up. The commercial vehicle sector also saw an increase of 23%.

These figures represent a strong end to the 2018 which began with similarly positive increases in new business in the construction and agricultural asset finance sectors. The asset finance sector is on course for another record-breaking year which will come as welcome news as bank lending to business continues to show a decline in loan approvals across much of the UK.

Despite the good overall news, technology equipment finance saw a fall in new business which pushed the overall figure down. It will be interesting to see if growth in new asset finance business is maintained in 2019.

Farm and Agricultural Finance

With the uncertainties surrounding Brexit Farming in the UK faces an equally uncertain future depending on any deal eventually reached with the EU. Whichever way the deal goes the farming industry will almost certainly lose out on EU subsidies and this will make funding an even more important consideration in the future. So how can specialist agricultural finance help?

Agricultural finance plugs the funding gap
Many traditional sources of farm finance disappeared following the financial crisis of 2008 putting farm businesses under increased pressure to find alternatives. Agricultural finance is an attractive alternative aimed specifically at the industry.

Agricultural finance can be secured against real assets
Farming and agricultural businesses will often possess more assets than other business types making them ideal for asset finance. Assets such as land and property gives farmers an opportunity to use these assets to save or invest in their businesses.

Agricultural finance loans offer flexibility
Today farmers often need to diversify to survive. Areas such as renewable energy can provide some potentially lucrative opportunities to generate extra revenue. Agricultural finance enables farmers to invest in these types of projects and minimise risks at the same time.
If you would like to find out more about agricultural finance contact us today to find out more.

Can I Get A Small Business Loan For My Start Up?

This is a common question asked by many a start-up founder who needs cash to get a business off the ground. The unfortunate reality is, a start-up represents a high risk to most lenders making them reluctant to provide loans to untested business start-ups.

While this might seem unfair, think of it from a lenders point of view. With an established business they will have some track record to go over before making the decision to lend. They will see things such as order books, records of paying customers and so on.

With a start up all they are likely to see is a business plan at best and an unproven business model. While the business might have huge potential in the eyes of the business owner, lenders, particularly those on the high street will be far more pragmatic.

Yet the start up phase is when a business is most likely to need the funding which is why it is important to discover what lenders of all types will be looking for before they offer a business loan.

If your business doesn’t have any sort of track record to rely on, then lenders will look at things such as your personal credit rating. If this is good then it will make you less of a risk as the business owner. Also you could look at alternative sources of finance such as asset finance depending on the assets your business might already possess.

Bridging Loans The Pros and Cons

There will be pros and cons to using any form of loan to fund your business and bridging loans are no exception. So to help you decide if a bridging loan is right for your business, here are some of the advantages and disadvantages of bridging loans.

So first let’s look at some advantages…

They are fast
Bridging loans tend to be arranged faster than other types of loan because they can often be used for urgent sources of finance when waiting too long might put the future of a business in jeopardy.

You can use more than one type of security
As long as the security you are using will retain its value. This means you can use assets that you may not be able to use as security for other types of loan.

The cons of taking out a bridging loan are…

You need assets to secure the loan
Unlike other types of loan, a bridging loan can only be provided if there are assets which can be provided as security.

You will be required to pay a lump sum at the end
This means the pressure is on from day one to earn enough money to cover the loan repayment at the end of the agreed term.

If you would like to find out more about the various different types of business loans available. Contact our experts today.

Two Thirds Of Asset Finance Brokers Say Brexit…

…Has Had An Impact On Investment

The fuss over the UK’s exit from the EU may have died down in the popular consciousness as people have largely resigned themselves to the inevitable, but the fallout in the business world is still playing itself out. This has led to many asset finance brokers blaming Brexit for decisions among business owners to delay investments.

This was at least the findings of a survey by United Trust Bank. Despite a long term boom in asset finance lending as businesses become more aware of its benefits compared to traditional forms of lending, 67% of asset finance brokers have said Brexit has had an impact on investment decisions.

The problem is said to be particularly evident in the vehicle, plant and machinery sectors indicating a fall in confidence in businesses that are likely to be seeking investment in these areas of their businesses.

Just over one third of asset finance brokers 33% felt that the UK’s exit from the EU wasn’t having any negative impact.
Much of what plays out in the coming months will depend on what deal the country makes with the EU and for businesses, whether or not their operations will be affected by Brexit if their market is largely or wholly domestic.

Asset Finance For Small Business – What Are the Options?

We often hear from small business owners who are unaware of their options when it comes to asset finance. This is understandable as awareness of asset finance as an alternative to bank loans is still low compared to traditional routes such as going to the bank.

Going to the bank for a business loan, however, can be a laborious process with the real possibility that you will be turned down if the bank feels your small business doesn’t fit strict criteria. Asset finance can offer an alternative in these cases if the business model is sound and your company already has assets which can be used as security.

With this in mind here are the main asset finance options:

Hire purchase
This involves purchasing an asset and spreading the payments over a period of time. The disadvantage is it means you will end up paying more for the asset.

Equipment leasing
This involves renting a vehicle such as a van or another piece of equipment important to the business. Again the cost of the equipment can be spread over a set period, sometimes with the option to buy at the end or continue paying monthly and upgrade to the latest vehicle or piece of equipment.

Asset refinance
This allows you to use your existing assets to raise cash. This usually comes in the form of a loan which releases equity from your asset. This is ideal if a business is rich in terms of assets but needs to protect cashflow. The downside is the lender can seize the asset if you don’t keep up the payments.

SME Business Savings Fall

SME business savings have fallen overall according to a recent study, however some sectors have seen savings increase.

Ahead of economic uncertainty and news that house price growth is stalling around the UK, it is perhaps surprising to hear that businesses are putting away less in business savings accounts.

Compared to last year, SME businesses are putting away 20% less over all according to research from the Hampshire Trust Bank. The average amount held in savings accounts by SMEs is currently £446,000 which is some way below the £556,000 recorded in 2016.

So is it a case of businesses digging into their savings more this year? There was nothing highlighted to suggest this was the case and in the IT and communications sector the opposite was true and firms were putting more away in savings with an increase of 5% overall on 2016. This was however the exception with charities and accountancy firms having 39% and 69% less held in savings respectively.

IT firms were said to be building average cash buffers of £843,000 putting among the biggest savers of all SME businesses.

The study indicates the need for business owners to understand the importance of protecting their businesses against economic uncertainty but it is also important to ensure that the best returns are made on those savings by shopping around for the best rates.

Dangers Exist On the Horizon For Many UK SMEs

Unstable government, rising inflation and skills shortages are just some of the challenges facing SMEs this summer and beyond as the economic climate begins to look more than a little unstable of late.

Even so most SME owners seem to be decidedly buoyant about their prospects with and optimistic 54% thinking there will be no impact on their business from Brexit. One in five of those who expect and impact meanwhile have a plan in place to combat any future effects. At least these were the findings in a survey recently conducted by AIB of 1,327 SMEs.

This optimism clearly goes with the territory for ambitious business owners who are on the whole positive thinkers. The hope is that things will turn out ok for everyone and we can all carry on as before but it doesn’t hurt to plan for any eventualities as you would do for any business.

Asset finance is an ideal way to raise funds for your business and even better when things are going well. Business owners often turn to asset finance as a last resort when they are rejected by banks or other lenders when the opposite should be the case.