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  • Mark Smillie

The Early Bird Gets The Worm


Company directors have full schedules and tend to prioritise their workload. In many cases, they are aware they will need business finance in the coming months but as cashflow is good now, this is left until the new contracts or work comes in or until they need finance.


“Well why not?”, you might say.


Virtually all finance companies and banks ask to see your last 3-4 months bank statements and they look for 3 things.


1) Any returned (unpaid) transactions.


2) Whether the company is in a time to pay arrangement with HMRC.


3) They will analyse the cashflow over the last 3-4 months, sometimes with some sophisticated computer programs, this will tell them a great deal, how the business is performing and what the underlying trend is.


This will have a significant impact in underwriting when a decision is made on what interest rate the finance is offered at (if an offer is made). If the company director uses a good finance broker, the odds of getting the best rates and minimum hassle will go up significantly.


However, the bank statements will make an impact on interest rate.


This reminds me of a recent case. A well-established company came to me and asked for £200k because they knew the business was going to take a major short-term dip in cashflow in about 6 weeks. We arranged a written offer in about 2 days, but they thought as we had done this so quickly and easily (if you know what you are doing it always looks easy until you try without practice and dedication!) they’d be able to cut out the middleman and do it themselves.


“Well,” they decided, “let’s see if we can get a better rate!”.


They applied to several finance companies, leaving financial footprints behind. They came back to us about a month later (I hate to say it we knew they would come back, as we took them to the right finance company first). They said they would like to accept the offer of finance we had secured for them but, the offer had expired. It had to go back in underwriting.


To cut a long story short, the new offer was only given if the directors gave charges on their houses, which was refused, and the company went into liquidation


Sad story but true, please forgive me, an old saying just came to mind.


"The early bird gets the worm"


If your business is looking for any type of finance that is what we do, including, any business in the construction sector.


If your business is in need, then please pick up the phone and tell me what finance would ideally suit your business, you are very welcome to call me on my mobile 07710 466166.


Mark Smillie

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