Guide to funding your business now and in the future

With such a wide variety of options available, identifying the right loan for your business can be challenging at the best of times. Add the impact of the pandemic into the mix and it can be difficult to know where to begin.

Swoop’s position as a funding marketplace, sitting between finance providers (banks, invoice finance providers, investors etc) and businesses looking for funding, means we are well placed to observe changes and trends in the funding landscape like which funders are in the game and the alternative options to government-backed schemes like the Coronavirus Business Interruption Loan Scheme (CBILS) that are gaining greater prominence again.

Swoop’s technology, coupled with our team of experts, will ensure you are matched with the most appropriate lender for your business. To help you on your way, here is a breakdown of the loan options proving most popular with Swoop customers at the moment:

Asset-based lending
If you’re in need of computers or other business equipment, leasing them may be preferable to using up cash reserves. Asset finance gives you access to additional business assets (e.g. equipment or machinery). In a time when it has become all the more important to ensure that workforces have all the equipment needed to work safely from home, lenders have reported an increase in the businesses opting for this type of funding.

Invoice finance
Enabling you to borrow money based on the invoices issued to your customers which are yet to be paid, invoice finance can be used to unlock this money early.
Rather than wait for the money your is business is owed, a lender will advance you most of the value of an invoice (or invoices) immediately.

Business cash advance
Targeted at retailers and other consumer-facing sectors, Swoop has seen an increase in liquidity from business cash advance lenders following the pandemic. In its most common form of a merchant cash advance, a cash advance is given based on predicated debit or credit card sales. This in turn helps businesses weather leaner periods.

Working capital loan
A working capital loan can be used to cover a business’s operational needs. To maximise your chances of obtaining an unsecured working capital loan in the £100,000 to £250,000 bracket, an area where we’ve seen increased demand in recent months, your business will need a good credit rating. You may also be asked for a personal guarantee.

Trade finance loan
Particularly relevant for businesses who are importing or exporting, a trade finance loan is another form of working capital finance that can give you cash to buy inventory or stock from a supplier in order to fulfil an order.

Re-bridging loan
If you’re looking to refinance an existing bridging loan at a better interest rate, or if your existing bridging loan is coming to the end of its term, you might need to arrange a loan extension (i.e. a re-bridging loan). The alternative is moving your loan to an alternative lender.

Tax credit loan
To receive a R&D tax credit loan you’ll first need to qualify for an R&D tax credit which can be claimed by a range of companies that seek to research or develop an advance in their field.

The main benefit of an R&D tax credit loan is that you can usually access funds quickly, whereas HMRC might take months (or even a year) to pay your tax credit.

Knowing your options, as well as the specific requirements a finance provider might have for a loan product, will maximise your business’s chances of success.

At Swoop we help business owners prepare all documentation (e.g. your most recent 6 months’ bank statements, a 12-month cash flow forecast and up-to-date management accounts) ahead of time, ensuring you aren’t held up at the point of application. For support, guidance and access to a wide ranging of lending products, simply register an account and speak to the team at Swoop today.