Friday 9 December 2011

The Chancellor has just announced a new ‘National Loan Guarantee Scheme’ to support lending to businesses – yet why is there so little enthusiasm in response to it?

The Treasury confirms this with these comments “the scheme might not increase the overall amount that banks lend to British Companies”. Businesses may see it as boost at a time when funding issues are a sensitive issue but the feeling is it's just another tape ridden scheme to ‘help’ businesses survive in this tough economic climate.

Our commercial finance specialists say - "No doubt it will be another scheme to join the tsunami of failed initiatives. Just ask yourself, what happened to the Enterprise Finance Guarantee Scheme – why is there such a slow uptake? What happened to the Enterprise Capital Funds? Local Enterprise Partnerships? The list is endless and it all seems to be entangled in red tape."

There are clearly incentives there but businesses are likely to struggle with the time to manage their applications for such finance. There is the copious amount of administration, time and extra costs businesses are unable to alocate to such projects. 

This is where our commercial finance parthers can help your business. We can apply for business finance on their behalf leaving them to manage and grow their business. After a free initial meeting with no obligation they will know the right way to access your clients finance whether it is direct through our strong panel of lenders or through a finance scheme thus overcoming the hurdles on your clients behalf. 

Contact us me and find out what we can do for you – there are no costs and no obligation to find out more!

http://www.moneysolutionsuk.com/commercialfinance.html

Thursday 8 December 2011

Guarantor Loans 
Guarantor Loans are one possible solution for customers who have never had credit in the past or have got an impaired credit and  require a loan. There are a great many loan products available in the Uk, but the guarantor loan enables customers who have a good character and willingness to pay the opportunity to raise a loan should they need one. It could be seen as an irony that consumers in the uk who require credit the most are the least likely to get it. If consumers with impaired credit are lucky enough to be offered a facility, they will more than likely be charged a higher rate for the privilege.

Many lenders in the Uk are targeting asset backed finance to give themselves greater comfort and security in the current climate. This move away from unsecured lending is exemplified by the range of available property-backed homeowner loan providers, and also the increasing number of niche products such as ones that enable a customer to raise money secured against personal valuables like cars, antiques or jewellery.

A guarantor loan could be viewed in a similar vein. If a customer cannot get a loan from his or her bank or doesn't meet the criteria of one of the other large financial institutions in the Uk it doesn't always follow that they have a poor track record of paying back a loan. If a customer hasn't had credit before they may be declined, if they have changed jobs or moved recently they may also be declined.

A guarantor loan is most likely not for customers who have a poor track record if they have no genuine intent to improve their situation. It is similar to applying for a job and not being able to supply character references. This type of loan will only be helpful to a customer who can find someone who is deemed a secure and responsible individual to stand guarantor to the loan. The guarantor for the loan is ultimately responsible for the payments should the applicant default, this is the lenders security.

The product is self vetting in this case. Ask yourself, would you stand guarantor unless you were extremely confident that the applicant was going to make payments on the loan? The guarantor generally is going be someone related to the applicant or very close to them or possibly in some cases an employer or landlord. They also need to be a homeowner and in receipt of a regular income. To prevent fraud the guarantor will be sent the proceeds of the loan to pass on to the applicant. This final stage in the process ensures that they are fully aware of their commitment and also verifies their relationship with the applicant.
Find out more by visiting us HERE


Monday 14 November 2011

What Options Are Available When Offering Retail Finance?

For retailers who have never offered retail finance then let me take a few minutes of your time to explain what it can do for your business, what it takes to get a facility in place and what the alternative are if you can’t get a direct retail finance facility.


True retail finance involves the use of Debtor creditor Supplier agreements (definitions) and requires the retailer to have a consumer credit licence with category C coverage on it. This will enable you to act as a broker and process consumer credit agreements through your various trading channels IE Web, Shop or mail order.


When I talk about retail finance I am usually talking about Interest free credit (IFC) as used by many large furniture outlets like DFS or SCS. There is also the Buy Now Pay Later (BNPL) product largely used in lower margin sectors such as IT and consumer electronics IE Currys, PC World etc. This product is not to be confused with IFC though as there is a significant difference between the two offers plus it’s also illegal for BNPL to be presented as IFC. Lastly there is interest bearing or classic credit, where the customer pays a rate of interest determined by the retailer.


There are other offers that could also be considered retail finance. Store cards as offered by large department stores for example and even some co branded credit cards available through many large national retailers and online resellers like Play.com. True retail finance though in my mind is that which is offered by the likes of Barclays Partner finance, Hitachi or v12 Finance. Fixed term credit agreements that are specific to the purchase of goods and or services from a specific retailer.


To offer retail finance a retailer usually needs to meet certain criteria to be accepted by a lender as an introducer. The criteria will vary from one retail finance lender to another but generally they are consistent in that they will all consider the products you sell, your retail sales turnover and your time in business. It may be that your business doesn’t meet some or all of the criteria and therefore leaves you without a retail finance offering.


This is an issue faced by many businesses throughout the Uk and considering the recent history in the retail finance market where two previously key players pulled out and another went into administration it may not change much in the near future.


The options then are to look to brokers such as moneysolutionsuk to help your customers who need finance the most get assistance in sourcing a loan that can then be used to purchase from you. It is a process sometimes dressed up as retail finance but the truth is that it is simply an alternative to traditional retail finance for companies who can’t get a direct line into one of the 6 main lenders. It may also be treated as a supplement to traditional retail finance where we may offer to help customers declined by a retail finance lender but still needing credit in order to buy.


If you can a direct line arrangement in place with a retail finance company then this frankly is the best process for you being that you will get paid directly by the lender and have control over the rates on offer. You won’t though be able to control the acceptance rates of the lender and in this sense having a back up offer such as Moneysolutionsuk may be very useful for business.


But what if you can’t get a direct facility? Our process enables you to advertise our facilities and enables customers who perhaps have been turned down for a bank loan or credit card . For customers who don’t quite meet the sometimes rigid and restrictive criteria of the big banks we can help. We use a rate for risk model and will work on the customers behalf to get a loan offer from an extensive panel of unsecured and secured lenders so whether the customer wants £1000 to buy a sofa or £25,000 to extend his house and fit a new kitchen we can perhaps help.


We can offer guidance on what’s available in the market based on personal experience and an honest appraisal of what we may be able to do. If we think you can get a line into one of the traditional lenders we’ll tell you. We don’t charge prohibitive arrangement fees or management fees as for the typical SME clients we support it simply doesn’t warrant it. Why should you pay for something we don’t do?


So if you want to discuss your options or are looking for a cost effective alternative to retail finance then contact us today