How do I know if my business needs external finance?

The short answer here is that it can be hard to know. Only 36% of SME’s utilise external finance, and in our experience not as many business owners are as aware of how a cash injection can help them.

What signs are there that raising some finance could help you? Well, these will vary, but there are some common trends:

1. Using personal funds: if you must invest from your own funds to help your business, it means your business’ finances might not be stable enough to sustain it. Using a commercial loan can help.
2. Invoice late payments: if there is the need for external funds to fix the gap between receiving payments from clients and covering operational expenses, then there is often a need to access new funds.
3. Low profits, low cashflow: if missing payments or difficulties to cover liabilities sound familiar, then you might be in need of a cash injection, even more so if profits are not enough to cover expenses. Running at a loss should not be something that businesses do for too long.
4. Customer complaints and delays: if your client’s needs are not met, there are problems somewhere else such as a lack of supplies or resources which risk serving clients effectively.

If your business has one or more of the signs above, then it might be worth looking at finding a funding solution, even for the short term. There are many options and it can be confusing for business owners so we recommend to use a broker to secure finance.

Here at ASC, we are able to secure finance for your business and help it get set for success. Get in touch with your local ASC office to find out more information.