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Small business finance advice: four ways to stay financially fit

A new year is often begun with a variety of unattainable resolutions. As a small business owner, we urge you to focus on just one, perfectly possible piece of small business finance advice for 2017 – financial fitness. Ongoing political and economic uncertainty is creating a challenging environment for SMEs in the UK. Traditional avenues of financial assistance are no longer as readily available: banks are withdrawing overdraft facilities and declining loans left, right and centre. 

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Tough times however, are not without their opportunities. Agile, small businesses are best-placed to capitalise on shifting market needs – but they need a positive cashflow to do so.  Limited access to finance is having a ripple effect throughout the small business eco-system, cash-strapping companies and curtailing their growth. 
 
Here is some small business finance advice to help you overcome these challenges. 

1. Manage your cashflow

Start with your budget. Create a realistic outline of your expenses for the year and regularly review it. Use it as a map to guide all your business decisions – no matter how big or small. Money is going to come in and out of your business faster than you can say ‘Brexit’; expect some unexpected expenses and put money aside to cover them. Late-paying customers are a perpetual problem that at best, are mildly irritating but at worst, can take your business under. Prepare for late payments by negotiating shorter payment terms and refusing to work with late-paying customers until you’ve been paid. 
 
Often, small businesses need financial assistance urgently. If you keep your accounts up-to-date and can provide a clear cash statement upon request, you’ll have a greater chance of accessing the funding you need, when you need it. 

2. Use technology

New technologies are making it easier for small businesses to stay on top of their administrative workload. Time-consuming tasks, such as debt retrieval processes, no longer need to be done manually and can be managed by credit control automation. 
 
All in one software solutions are available and affordable, and can assist you with accounts management. You’ll always know which bills are overdue, how much money you are owed (and by who), when money comes in and when it goes out. Technology can work hard for you and give you a level of financial oversight that allows you to focus on your growth plans and customer engagement. 

3. Don’t exceed your credit limits

As soon as you exceed your credit, your access to growth finance facilities will be restricted. If you don’t have the right checks and balances in place, you could overstep the line without realising it and you are putting your business at risk. 
 
If your credit history is sub-par, business lenders won’t work with you. You’ll be stuck in a tricky situation with limited options that could affect your reputation as well as your growth plans. 
 
Keep your personal credit rating healthy too. In a small business this matters; business loan providers will review your personal finances to assess your suitability for financial assistance. Make sure you don’t mix your personal and business expenses. It will only muddy the waters and if anything goes wrong, you won’t have anything to fall back on.

4. Know your business funding options

What you might not realise is that you actually have a lot of choice. There are many new government funding schemes, alternative finance providers and small business initiatives that could be a perfect fit for your business. Start researching now. That way, you’ll be ready to grab any opportunities to grow your business as they occur. 
 
Nucleus can help. We offer bespoke business funding solutions that include a range of options -  business overdraft, unsecured business loans, invoice finance, secured business loans, or construction finance.  
 
Talk to our team of experts today for further small business finance advice, and to find out how we can help your company achieve long-term financial fitness. 

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