Seize your chance for growth

The cost of living crisis has been covered extensively in the media over the past few months, but what has been less comprehensively reported is the rising cost of doing business. In this article we take a closer look at the mounting costs facing business owners and the impact they have had, and we also supply hints and tips for anyone looking to borrow.

Starting with some good news, our recent survey of close to 1,000 UK SMEs, including many in Scotland, tells us that, in spite of the multiple pressures facing them, business owners’ appetite for borrowing to invest in growth is the strongest it’s ever been, with two thirds of respondents (Scotland: 62%) answering “yes” to the question “Does your business plan to seek funding for business investment in the next 12 months?” 

While investment intent is strong, some 40% of firms (Scotland: 35%) have missed a business opportunity in the last 12 months due to a lack of available finance. In addition, confidence in the economy has cooled, with 54% of UK SMEs concerned for further economic slowdown – in Scotland this figure rises significantly to 64%. 

Impact of inflation

In Scotland, two thirds of businesses have been negatively impacted by rising inflation, and only 23% feel the Bank of England’s target of 2% is realistic in today’s high-inflation business environment. A further 45% don’t feel raising interest rates is the right thing to do to help curb inflation (25% “yes”; 29% “unsure”). 

While businesses have been asked not to raise wages, over half will be doing just that as they try to help their employees keep up with rising costs. 

In addition, three quarters of firms plan to pass additional costs onto customers (24% “fully”; 49% “partially”), while the remaining quarter have chosen to absorb the costs, which will in turn have an impact on their cash flow, which these respondents admitted was the ultimate outcome. 

Tips for borrowers

All lenders will be asking for more information from borrowers because, as the UK’s economy continues on its current projected path, underwriting criteria will inevitably tighten. 

But please don’t take this personally – this is true for all lenders: a willingness to offer information gives a good impression to a lender. 

Be prepared to offer information – the clearer the picture we have, the easier the decision is to make. Recent accounts and bank statements are a must, but if these aren’t available, management information is helpful, along with cash projections for the period ahead. 

Be prompt in responding – the sooner we receive the information the quicker our decision gets to you.

Provide ALL the details – for example, recent house moves, multiple properties, all directors of the firm (lenders will do searches), recent changes from partnership to limited company. 

Products to help you grow

Business loans – Our unsecured business loans are available when you need to borrow funds to invest, injecting cash when you need it. 

Consolidation and refinancing loans – If you have several existing agreements, credit card balances or other regular finance repayments, a consolidation loan may be the way forward. 

Personal loans – Personal loans are unsecured and can be used for virtually any purpose other than for the purchase of property. 

Tax loans – Our popular tax loan facility is designed to help manage this recurring expense. Our unsecured tax loans permit you to spread the cost of your tax demand into more affordable monthly payments.

Payment can be made directly to HMRC or to a bank account of your choice.

Hire purchase – Hire purchase allows outright ownership of the asset and enables you to spread the cost over a term that suits you.

Leasing – If you want to maximise the use of your equipment without the responsibility of owning it, leasing will give you the freedom and flexibility you need.

For more information visit www.braemarfinance.co.uk/legal