Arguably, the sense of economic uncertainty that comes with recession has perhaps been worsened by the contrast between today’s climate and the benign conditions we’ve enjoyed for most of this decade. When the economy boomed, many businesses enjoyed spectacular growth. But over one or two years, there has been a correction of revenues that has challenged even healthy companies.
In these conditions, some businesses struggle to accurately predict their forecasts and cash flow requirements. Along with the possibility of falling revenues comes the prospect that customers may go out of business and leave debts unpaid, while others may choose to delay payment.
Traditional lending facilities that were adequate during the boom years may not suffice in the current climate. Even a temporary fall in order books, coupled with prolonged payment terms can make it hard to pay suppliers and staff. In the downturns of the 1980s and 1990s, companies could rely on the banks to provide the necessary buffer. Today, however, the situation is less certain. Two years after the collapse in the US subprime mortgage market, many banks are still repairing their balance sheets. Consequently, new finance can be hard to come by.
We’re here to help
The good news is that Venture remains committed to supporting business. This year we’re celebrating 20 years of helping thousands of businesses in times both good and bad, maintaining a consistent approach to UK business throughout.
We work in partnership with our clients, focusing on business plans and discussing challenges. We focus on key figures, such as revenues and margin, while also assessing cash flow needs. We also look at how the business is structured financially. Does the company have the right debt-to equity ratio, for instance? In some cases, it may be appropriate for the equity holders to inject more cash into the business in support of a new financing facility. The important point is to work in concert with management in order to fully understand their business.
By cultivating a thorough understanding of our clients, we’re able to make a speedy and accurate assessment of the solution required. Our aim is to not just offer a financial solution for day one, but to offer a package that will work in practice for the foreseeable future.
There are times when we are unable to provide the level of finance requested. In these situations we do our best to move things forward. We may agree certain targets with our clients, which may well enable us to offer further support at a later stage. We have several ways of working hand in- hand with our Invoice Discounting and Factoring services, including Asset Based Loans against stock, plant and machinery, and property, together with loans through the Enterprise Finance Guarantee scheme. Our Bad Debt Protection service has also seen an increase in demand, providing clients with peace of mind in these challenging times.
Our wide range of services mean that we can offer comprehensive packages that suit the requirements of a wide range of company needs. We remain very much here to help.
Stephen Farrelly is writing on behalf of Venture Finance, providers of Factoring, invoice finance and asset based lending services
Article Source:http://www.articlesbase.com/fundraising-articles/getting-support-for-your-company-through-difficult-times-1277803.html
