Business Finance FAQs

Here are the responses to just some of the business finance FAQs we at ACF Direct has recently received.

We hope they prove to be of use.

What will my business need in order to secure assistance in getting a new asset?

Typically, you will need to provide some evidence that your business is active and has been producing annual accounts for a specified number of years. Broadly speaking, the evidence will be used to ascertain whether or not you will be able to afford the monthly payments associated with the funding solutions that might be suitable.

As a Director, will I be required to provide personal guarantees?

Possibly. It depends upon the exact position of your company and the facility you are looking for.

It’s impossible to answer this one in general terms, as the specifics are important. Do please contact us for the earliest possible discussion of your unique situation.

If I am purchasing an asset on HP terms, why can’t I sell it at some point if I need to raise capital?

The answer is – because you don’t actually own it until you have finished making your monthly payments. You’d be trying to sell someone else’s property and that is an offence.

Of course, things can change during the period of an HP agreement. It is always worth speaking with the provider of your financing in order to see if they can assist in a specific situation where a problem has arisen.

Why have I seen articles relating to a change in the accounting treatment for leasing agreements?

Prior to January 2019, an operating lease and a finance lease might have been treated differently in your books of accounts.

This distinction will no longer exist from January 2019, after which the accounting treatment of both forms of leasing will be harmonised.

If this doesn’t mean much to you, it may be worth speaking to your accountant or alternatively contacting us for further clarification.

Can I get short-term business finance to assist me in overcoming an unexpected cash-flow problem?

Yes, though as with any form of business funding, it will be subject to status.

If you find that you are regularly embarrassed by cash-flow difficulties due to delays in getting your invoices paid, it might be worthwhile speaking to us to discuss solutions such as invoice factoring and invoice discounting.

Is it easier to get business finance from specialist providers or to apply for a bank loan?

Again, it is impossible to give a specific answer to this type of question.

What we can say is that in today’s financial reality, some conventional banks may be rather more risk-averse where business lending is concerned, than might have been the case prior to 2008. There may also require more time to review applications and seek more in-depth and more numerous pieces of supporting justification than you might find with the typical modern specialist provider of business finance.

Typically, companies offering business finance services are dynamic and agile. They understand the speed with which modern business needs to operate and they will respond accordingly.

Will I be able to secure funding if my business has experienced financial troubles previously?

There is no hard and fast rule which states that previous problems will mean difficulties in obtaining finance.

Many businesses, including some of the largest and most successful and the world, have experienced financial difficulties in their history. So, there is no need to feel pessimistic about your chances because you have experienced likewise.

Of course, every case is different and needs to be considered on its merits. Funding providers will typically have methods of assessing the risk involved in lending to a company and deciding whether or not they wish to continue. This is something we can assist you in understanding further.