Given what might be happening in a few months, diversifying is back on the agenda for farmers with unused land currently going to waste.
Creating a campsite can provide a profitable new business opportunity for uk land owners.
Camping is undergoing a revival, and with more people looking to ‘stay in the UK’, holidays and short breaks in the great outdoors are set to skyrocket. This offers vast opportunities for rural farms, which are often well located for a range of target camping markets.
Nationwide has a long history of Financing within the Agricultural Sector and you’ll find us friendly and open to exploring the opportunity with you to “make it happen”.
Choosing Your Target Market
The camping market is surprisingly broad and you can differentiate yourself by providing a clear offer. You might, for example, want to provide a family-only campsite with a cooked breakfast on offer and a farm-hand experience for children. You might simply want to offer electrical hook-ups and camping space to local walkers. You might even want to break into the luxury camping market by setting up ‘glamping’ tents or yurts.
You could invest in eco-pods for walkers and sportspeople.
Refining Your Offer
Think about what will make your farm stand out. For example, a high-spec toilet block can be a huge draw for women and families. You can obtain specialist asset finance to create the facilities that you’ll need to effectively market your offer. You might also want to invest in outdoor cooking facilities or a communal kitchen. Think about whether there are local stores and supermarkets. If not, you might want to provide home-grown food and local produce for your guests. You might also want to upgrade to offering motor-home hook-ups and even studios or log cabins.
We even partner with Farmers selling holiday homes by providing finance for their clients running it as a business, especially where loans are not possible by some other method.
Depending on your ambitions, good asset finance can make all the difference in extending your business plan further.
Contact your local council for advice about health and safety regulations and other information on rates and business set-up advice. Your council may also be able to offer a local camping accreditation scheme and advice on marketing your business effectively.
Remember to invest in digital marketing by creating a website and also making use of social media channels to promote your campsite to prospective visitors.
Ensure that it is listed in relevant directories and holiday brochures and promote it locally by using notice boards and flyers. Consider buying advertising space in holiday magazines and travel publications and even look into investing in Google Adwords targeted online advertising to reach your audience. Think about all possible options you might want to advertise in a specialist running magazine if a long-distance race occurs near your farm, for example.
Or, call us today on 01234 240 155 and we’ll do our best to help you.
If you need funds fast, you need funds fast. Perhaps you need funds fast because of an unforeseen expense, or because you have taken on a contract on short notice and need to acquire equipment to get the job done.
Whatever the case, there are alternative sources of funding outside regular finance to consider. These may be useful if you have been turned down for traditional credit, or if you can’t access a good rate with traditional finance.
The following alternative sources of finance are also typically faster to arrange than standard business finance and have unique benefits. There are three types to consider and which is right for you depends on your circumstances:
For: Businesses with valuable assets
Refinancing is a relatively simple finance facility in which you sell an asset you own to a lender. The lender takes ownership of the asset on paper, and then hires the asset back to you physically over a term that spreads the cost of purchase. Typically, agreements run from 12 to 60-months, but some run for 6-months.
Over the term you get exclusive use of the asset. It stays in your business, fully deployable. Assets prime for refinancing include commercial vehicles, industrial equipment, machinery, office electronics and specialised equipment, like cameras and lenses. You can release 100% of the current market value of the asset.
For: Businesses struggling with cash flow
Thousands of small and medium-sized businesses struggle with cash flow, and the number one reason for that is unpaid invoices. This can happen because a client is late paying, or because the payment terms leave a large gap between completing work and getting paid. A good example is Net 30 or Net 60.
Invoice discounting uses your sales ledger (unpaid invoices) as collateral for finance. Every time you raise an invoice, you can get paid earlier by selling the invoice to the lender.
This has the benefit of giving you access to money you are owed earlier, which will solve many a business’s cash flow issues.
For: Businesses who need an asset only a short while
One of the conundrums some businesses face is acquiring expensive assets for only a short period of time. Say, up to 12 months. This may be necessary to fulfil a single contract, perhaps as part of a construction project. Finance leases and hire purchases aren’t suitable because they are for longer term use.
The solution is an operating lease. These leases last 6-12 months and don’t have the option to extend the lease or purchase the asset.
It is a simple lease agreement with strict, set terms, with the benefit of a clear destination for you, the lessee. For an initial outlay of perhaps just a month’s rental, you get to acquire expensive assets without the risks and rewards of ownership.
Want to find out more?
As a specialist broker we can advise and recommend finance products based on your individual circumstances. Our team are here and ready to help
On the face of it a computer or Mac isn’t much money, but when you multiply the number of workstations you need and consider other equipment like servers, and then the furnishings like office chairs and desks people need to do their jobs, the costs to equip a web studio soon stack up.
The biggest costs are the electronics and the cost to equip a small web studio with four workstations is around £15,000.
If that sounds a lot, consider the cost of a mid-range 27” Mac — £1,949 at the time of writing. Most web studios have a mix of Mac and PC, and if you want to give a developer a good PC to do their job, you’re looking at over £1,000 including the two 4K monitors they’ll want to use (a web developer must have).
Then you have your telephone system, dedicated server which you host your client’s websites on, the IT infrastructure to run it, and printers and scanners.
And let’s not forget about the desks and chairs you need, or the office furnishings so people aren’t working in a boring box all day.
That £15,000 figure isn’t looking so expensive now, is it?
£15,000 is actually a conservative figure on our part – you’re looking at £2,000+ per workstation for Macs and £1,000+ for PCs. And these are only part of the studio itself, even if they account for the bulk of the cost.
Assuming you ultimately want to own all this equipment, the easiest way to finance the expensive stuff – your Macs, PCs, servers, etc. – is to purchase everything in one go on a hire purchase agreement with a specialist lender.
A specialist lender can purchase everything you need for your studio under one hire purchase contract. This has three benefits:
- It keeps your monthly repayments as low as possible
- It means one single payment per month, not several
- The monthly payments are fixed and can be offset against your tax bill
A hire purchase is a simple finance facility in which a lender purchases equipment on your behalf and you pay them back over a set term.
Once this term comes to an end and you have repaid what is owed, your contract with the lender ends and full ownership of the equipment passes to you.
It is simply a means to spread the cost of purchase to make payments palatable. You can take out a hire purchase over 12 to 60 months. A lower term means you will pay back less overall, but the monthly repayments will be higher. A longer term means you will pay back more but the monthly payments will be lower.
Only a few specialist lenders can purchase multiple assets under one hire purchase agreement and our sister company Blackrock is one of them. As a broker, we can introduce you to these products and help you secure the finance you need. Call us anytime on 01234 240155 to find out more and we’ll do our best to help you.
Acquiring expensive equipment outright isn’t feasible for everyone, and even if it is financially, there may be no point if the business only intends to keep hold of the equipment for a short time – i.e. for only part of its usable life.
This is where a finance lease comes into play. With a finance lease, you get unlimited use of equipment over a period of time, after which the asset is returned.
If the lessee plans ahead, this means it’s possible to take out a new lease as the old one ends and acquire newer, even better equipment with low initial outlay.
There are six other key benefits of a finance lease for your business:
Small initial outlay – this can be as little as one month’s rental. Increasing your initial rental has the effect of lowering your monthly payments.
Monthly payments – these are spread over a set term dependent on the value of the equipment, and what is manageable for you.
Opportunity to extend – finance leases often give you the opportunity to extend the lease at the end of the agreement. An example of where this may be desired is if you still need the equipment to fulfil an order or contract.
Opportunity to sell – you can also opt to sell the asset at the end of the agreement. If you choose this option, the sale will be managed by the lessor and most of the profit from the sale will be passed onto you (if there is any).
Tax deductible – the monthly rentals of a finance lease are fully tax deductible. The VAT on a finance lease is also fully reclaimable as a capital allowance.
Keeps cash in your business – this is perhaps the most important benefit for businesses without the luxury of a cash stockpile. A finance lease does not require a large initial outlay or payment further down the line. This keeps cash in your business and doesn’t disrupt your cash flow to any great extent.
What can be purchased on a finance lease?
Finance leases are most popular with vehicles of the domestic, commercial and industrial varieties, as well as plant equipment, machinery and electronics like computers.
Mostly however this finance facility is used to acquire high-ticket items because there is a balloon built into the agreement which isn’t repaid during the course of the agreement. This has the effect of lowering monthly rentals considerably versus a hire purchase, which is where you pay off the full purchase price over time.
Ultimately, you will never own the equipment leased on a finance lease, unless you trigger an option to purchase. The benefit of this is lower payments over the course of the agreement. The downside is if you do opt to purchase, you will end up paying way more than on a hire purchase to begin with. For this reason, a finance lease is best used to acquire assets you do not intend to own outright.
Buying a business with finance is the simplest way to go about it, other than the buyer fronting up the cost themselves.
Depending on the amount involved in the transaction, you will need unsecured or secured finance from a specialist lender. The typical ceiling for unsecured finance is around £25,000 so most acquisitions will involve secured finance.
Lenders prefer secured finance for larger amounts because the amount is secured against property as a failsafe. This fact means you enjoy lower rates versus unsecured finance which will drive the total cost of purchase down.
Here’s what you need to do to get started:
Get the business valued
To raise finance with any lender you need a solid valuation of the business. Valuating a business is not a simple exercise so should be outsourced to an independent, reputable evaluator. And always, always get a second opinion. Only when you understand the value of the business should you proceed.
Raise your own money
It’s important you know that with any business purchase you need your own money too. Lenders are unlikely to fund the whole purchase price. You must assume some of the risk. 30% is the golden figure to aim for – that’s 30% of the total purchase price of the business in question. And the higher the better.
Collect financial information
Lenders will want a high level of insight into the business being purchased. They will want to review the business’s unaudited and audited accounts and review bank statements to determine solvency. Also, they will want to determine the financial status of the group or individuals buying the business. This is necessary for due diligence.
Demonstrate skills and knowledge
Lenders base their lending decisions on risk. Someone who knows what they are doing, either through experience or study, is far less of a risk than someone who doesn’t have any experience or knowledge. A cover note detailing your experience and how it is relevant to a takeover goes a long way to providing reassurance.
Create a professional business plan
Just because you are buying an established business this does not mean it will continue to be successful. To show it will be, a professional business plan is absolutely necessary to answer the lender’s questions and reassure them. You need to explain how funds will be used and how the business will be run. You also need a forecast, profit and loss account, up to date balance sheet and cash flow figures.
Find yourself the best possible finance
The quality of a finance product is determined by the lender, but there are variables you can try negotiating or tweaking to your needs. Fees, rates, payments and early settlement charges are the four variables in question. These differ from lender to lender. Do shop around for the right product but save your applications for the good ones (if you apply for finance too many times in a short period, this can count against you).
If your retail business is struggling with cash flow, there are actionable steps you can take right now to improve the situation. In this article, we’ll cover a few finance and fundraising options available to you.
- Consolidate existing debt
If you have several existing finance agreements, it makes sense to consolidate these into one larger agreement. This could reduce the overall amount you pay and will certainly make keeping up with your repayments easier.
It is possible to consolidate multiple refinance agreements into a new one and consolidate hire purchase agreements and finance agreements together. However, this depends on your lender so ask them about the possibility to do so.
- Seek a new payment merchant
As retail businesses grow one of their largest ongoing costs are transaction fees or payment fees. 1.5% of each transaction is normal with online businesses. A new payment merchant could offer you a much better rate to reduce your expenditure.
A small percentage decrease in transaction fees could make an enormous difference to your bottom line. You can try negotiating with your payment processor if you process lots of transactions or expect to see growth in the coming year.
- Liquidate excess inventory
Most retail businesses struggling with cash flow are struggling because all their cash is tied up in inventory. If this is the case and you need rid, it makes sense to liquidate it to raise money and hopefully claw back what you paid for it.
Put excess inventory on sale, list it on eBay or Amazon, bundle items with other products (such as a free X when you buy Y) or do buy one get one free offers. Pricing strategies can be a god send when you have excess inventory to get rid of.
- Make use of invoice discounting
Invoice discounting enables you to leverage the value of your unpaid sales ledger as a short-term solution to improving cash flow.
it involves leveraging money you are already owed. What invoice discounting does is advance you a proportion of the invoice amount. This is usually up to 80% of the invoice total which may be enough for your needs. If you are struggling with cash flow because you have unpaid invoices, this is a relevant solution.
- Release money tied up in assets
If you have valuable assets such as a POS system, computers, or machinery free from finance, you can release their value by refinancing them.
With such an agreement, a lender buys the asset from you and hires it back to you for an agreed term. This is not a loan; it is a simple purchase and hire back arrangement. You get to keep hold of the assets in your business. Come the end of the agreed term, assuming all fees are paid, ownership of the asset will pass back to you.
To find out more about refinance, call our team on 01234 240155. We have helped hundreds of retailers improve cash flow with it.
If your business has not started trading yet you can still take out finance, although the business must have been incorporated in the case of a limited company or registered with HM Revenue and Customs in the case of a sole trader.
Because you have not started trading yet you will find the number of lenders you have access to is smaller than if you were already trading. This is because many lenders want to see some history of trading and won’t lend to those who can’t show it. This would ordinarily be three to four month’s bank statements.
With this in mind, you will be required to provide other forms of reassurance to show you have means to repay what you borrow. These include:
A personal guarantee makes the director liable for the business’s debt in the event the business becomes unable to repay it. This is nearly always necessary with new business or start-up finance to mitigate risk.
Professional business plan
Because you are a new business your lender will want to see a professional business plan so they can get to understand your business. This will include financial projections and profit and loss with an explanation for how the money you borrow will be used. This insight will be invaluable for the lender in their decision.
Whether you are a limited company or a sole trader, your personal credit score matters because you are signing for the finance on the dotted line. Your lender will access your credit history through a company like Experian or Equifax to confirm your personal details, see how much debt you are in and see if you pay back well. A bad or poor credit score isn’t a deal breaker, but it could limit your opportunities.
If the amount you wish to borrow is over £25,000 or you have a bad or poor credit score, you will likely be required to provide collateral to secure your finance. This is especially true if you haven’t started trading yet. Collateral can be real estate, property, vehicles, machinery or anything else within reason, so long as it covers the value of the finance and is owned by you. It can’t be on finance already.
Types of finance for new business
Depending on how you intend to setup and operate your business, you will need unsecured finance or secured finance.
Unsecured finance has a lower finance ceiling, but it doesn’t require you to front up anything to get it. You will still be required to provide a personal guarantee though, which means it isn’t completely risk-free.
Secured finance has a finance ceiling up to £500,000 and is used in cases of larger amounts and in cases of poor or bad credit history. A personal guarantee is often still required but in return you get lower fees and rates.
If you would like to find out more about these finance types and which is best for your use case, please call us on 01234 240155.
Unsecured loans from banks can be tricky to secure if you have a poor or low credit score, or little credit history at all. The reason is risk. Banks risk profile each customer, largely based on what they see in your credit report. If their computer doesn’t like something, then it will spit your application out and say no.
The trouble with this is you rarely get an answer as to why. But more frequently than not, it’s because the amount you want to borrow is too much based on your credit profile. This is usually caused by a poor credit score.
One of the savviest ways around this in the case of making an equipment, vehicle or machinery purchase is to use a hire purchase agreement.
Under a hire purchase agreement your lender buys the asset for you and then hires it back to you over 12 to 60 months. At the end of the agreement, you own the asset, and your relationship with the lender ends.
You can look at this as spreading the cost. The actual cost of borrowing varies from lender to lender. In the case of unregulated finance, which is popular with businesses, the cost of borrowing is determined by the monthly fees. This is added onto the cost of your payments, the same as an interest rate would be.
The reason a hire purchase is easier to obtain than an unsecured loan is because the lender is effectively making a purchase of an asset which they then hire back to you. The lender becomes the owner of the asset. So they purchase an asset and retain ownership for the duration of the contract. This brings reduced risk, because if you default on your payments, they can just repossess the asset in question.
Risk and fees
This is the main risk to you – risk of loss. However, this is the same as with any type of finance. Loans, secured credit, unsecured credit – whichever type of finance you look at, all have some risk of loss. The difference with a hire purchase is the amount is secured against whatever the asset is. So loss in this case is the asset.
Applying for a hire purchase is much the same as with an unsecured loan, except the content of the application includes the asset, or ‘Goods’. Your payments should be fixed for the duration of the agreement, so you know exactly how much the cost of credit is.
You can work out the cost of credit by deducting your fees from your payments and multiplying them by however many months the agreement runs for. Make sure you also include the Purchase Fee, if applicable.
We can assist you in securing a hire purchase agreement for equipment, vehicles or machinery for your business. Contact us today to find out more. You can reach us on 01234 240155 or email us at email@example.com.
If your business has grown to the stage where it needs more space, then a congratulations is in order. You have successfully taken your business to another level, and it takes big commitment to make that happen. So well done.
After the purchase of your new building you may need to carry out improvement works, or renovation works, to bring it up to where you need it to be.
This could be something as simple as a fit-out, or something as complex as knocking through walls and rewiring the place.
You could pay with the cash you have in the business but doing so would deplete your reserves. It’s often best to keep cash in your business so you can boost operating capital as and when you need it. Borrowing what you need with finance enables you to access a lump sum and pay it back over a period that suits you.
Your options are simple: unsecured finance, or secured finance. Which is relevant to you depends on how much you need to borrow.
Do you need to borrow up to £25,000?
If you need between £10,000 and £25,000 for your renovation work, you may be able to take out unsecured finance.
Unsecured finance is taken out without the amount being secured against an asset. It is lent to you based on your credit score. Those who have a good credit score will usually be approved for unsecured finance. Those with a poor credit score may find it more difficult to be approved, or that lenders increase their fees. You can repay unsecured finance over 12 to 60 months to suit you.
Do you need to borrow more than £25,000?
If you need to borrow over £25,000, up to £500,000, you will be required to provide security against the finance amount. This is called a secured loan.
The type of security you provide, or asset, depends on the amount you need to borrow. If you need to borrow up to £50,000, a vehicle or two may do it. If you need to borrow more than that, you will probably have to front up real estate. This brings with it risk of loss and a charge will be placed over the secured assets. As with unsecured finance you can repay secured finance over 12 to 60 months.
Do you need finance for equipment?
If it is a fit-out you require and you only need finance to fund the purchase of equipment, such as industrial ovens or lathes, a hire purchase would suit.
With a hire purchase the maximum purchase amount possible is determined by what you can afford and your credit profile. You can finance several assets under one agreement and spread the cost over a maximum of 60 months. This makes the acquisition of expensive assets easier and keeps cash in your business.
We have a wide range of finance products suitable for retail renovation. Call us today to find out more. You can reach us on 01234 240155.
What does expensive mean to your business?
An industrial lathe at £10,000? A Fendt 1050 Vario tractor at over £300,000? Point is, expensive can mean different things to different businesses.
What all businesses agree on though is any machinery is acquirable with the right finance facility. Why? Because it allows you to spread the cost of your purchase. You can split the total purchase price of an asset over a term that makes monthly payments affordable. If this is something you want to do, you have a few options.
Unsecured finance is relevant if you need to borrow up to £25,000 to fund the purchase of machinery for your business. You do not have to provide collateral to secure the finance, but the main director of the business will need to provide a personal guarantee on it. You can spread the purchase over 12 to 60 months.
This finance facility is suited to businesses who do not have a deposit because it provides complete funding in one go.
Secured finance requires you to front up collateral to secure the amount. In return it gives you access to a higher finance ceiling – you can borrow any amount up to £500,000 secured, providing your business is solvent and healthy. As with unsecured finance, with secured finance you can spread it over 12 to 60 months.
Again, this finance facility is suited to businesses who do not have a deposit, or in cases where you need access to funds to negotiate a bulk purchase.
Hire purchase agreement
If you already have a deposit for the machinery, a hire purchase agreement is a savvy purchase method. With a hire purchase the destination is ownership. Your lender buys the asset for you and then hires it back to you. You pay back the lender over the term and come the end of it ownership passes to you.
A hire purchase allows you to spread the cost of high-ticket items over a term that suits you with manageable monthly payments.
Sometimes it won’t be possible for you to pay off the total purchase price of an asset, perhaps because it is just too expensive. If this is the case, a finance lease offers lower payments than a hire purchase because there is a balloon payment built into it which takes a portion of the asset value and locks it away.
There is a route to ownership at the end of a finance lease – you just have to pay the balloon and outstanding fees. However, most businesses return the asset. This makes a finance lease a good option if you only need machinery for part of its usable life.
Discuss your needs with our team
We can recommend the right finance facility for you based on the value of the equipment you need to purchase. To discuss finance for your business, call us today on 01234 240 155 and we’ll do our best to help you.