Best SME Business Finance Solutions to Expand Your Operations

As a business owner, you know that growth is essential for success. However, securing the necessary funds to expand your operations can be a challenging and overwhelming task. That's where SME finance solutions come in. 

In this blog, we’ll explore how SME finance can help businesses struggling to reach their next stage of growth and offer guidance on how you can expand your operations and reach your growth goals. 

Why SMEs are looking beyond the high street for financing growth

In today's increasingly competitive business landscape, it's becoming harder for small and medium-sized companies (SMEs) to secure funding from traditional high street banks. As a result, SMEs are now exploring alternative financing options offered by specialist brokers and lenders. But why exactly are businesses looking beyond the high street for growth finance?

Key reasons SMEs are seeking business finance:

• Boost company growth

• Raise additional working capital

• Digital transformation

• Fund new equipment and machinery

• Renovate premises

• Manage growing staffing costs

• Expand business operations

• Ease cash flow and cover delayed invoice payments

• Invest in advertising, promotion, and marketing campaigns

The best SME finance solutions for powering business growth

So, let’s dive into the options open to your business, including the best SME finance solutions to choose from and the key benefits and use cases for each solution.

Business Loan

Business loans are financial products designed to provide companies with the capital they need to support growth, operations or specific projects. Types of business loans include secured loans, which require collateral, and unsecured loans, which don’t require collateral.

Benefits

• Fast access to capital: Address immediate financial needs.

• Improve cash flow: Smooth cash flow challenges.

• Versatile funding options: Allowing businesses to use the funds for various purposes.

• Empowers business growth: Whether for new equipment, hiring or expansion into new markets.

Use cases

• Expanding a product line or service offerings.

• Renovating or expanding physical locations.

• Hiring and training employees.

• Purchasing new equipment or technology.

• Covering operational expenses during slow seasons.

• Investing in marketing and advertising campaigns.

• Managing unexpected expenses or seizing growth opportunities.

Asset and Equipment Finance

A popular SME finance solution is asset and equipment finance, which are tailored financial solutions designed to help businesses acquire essential assets, tools and equipment to empower their workforce. These financing options come in various forms, including leases and hire purchases, providing flexibility to suit diverse business needs.

Benefits

• Preserve capital: Finance assets without depleting your capital reserves.

• Upgrade and expand: Easily access the latest equipment and technology to stay competitive.

• Predictable budgeting: Fixed payments simplify financial planning.

• Flexible terms: Tailor financing to match the lifespan and usage of your assets.

Use cases

• Acquiring machinery for manufacturing or production.

• Upgrading office technology, including computers and software.

• Expanding your vehicle fleet with commercial auto financing.

• Outfitting a new restaurant or retail space with equipment leases.

• Funding large-scale construction equipment for infrastructure projects.

• Keeping medical practices up-to-date with the latest healthcare technology.

• Supporting agriculture and farming operations with equipment financing.

Invoice Finance

A dynamic funding solution becoming more popular is invoice finance, which unlocks the value of outstanding invoices. It allows businesses to access working capital quickly by selling unpaid invoices to a finance provider at a discount. Two common forms of invoice finance are invoice factoring and invoice discounting.

Benefits

• Improved cash flow: Instant access to cash tied up in outstanding invoices.

• Predictable income: Steady revenue stream without waiting for customer payments.

• Flexibility: Choose between factoring and discounting to suit your business needs.

• Working capital: Funds available for growth, debt management or day-to-day operations.

Use cases

• Managing seasonal cash flow fluctuations.

• Expanding business operations and investing in growth opportunities.

• Meeting payroll and supplier obligations on time.

• Reducing credit risk by transferring customer payment responsibility.

• Funding marketing and sales efforts to drive business growth.

• Resolving cash flow issues when waiting for slow-paying customers.

• Navigating business challenges and financing everyday expenses.

Commercial property finance

If you’re looking to invest in or manage commercial real estate, commercial property finance is a specialised financial solution to consider. It encompasses a range of financing options, such as commercial mortgages, bridge loans and property development finance, designed to support various property-related needs.

Benefits

• Real estate investment: Secure funding for property acquisition, development or renovation.

• Diverse property types: Finance options are available for offices, industrial spaces, retail properties, and more.

• Competitive rates: Access to favourable interest rates and loan terms.

• Tailored solutions: Financing options to match the unique requirements of your property project.

Use cases

• Purchasing or refinancing commercial properties.

• Developing or renovating existing properties for increased value.

• Expanding your business with additional locations.

• Leasing or upgrading office spaces to meet evolving business needs.

• Navigating property development projects, from planning to completion.

• Acquiring land for future development and investment.

• Utilising property assets as collateral for working capital or business expansion.

Merchant cash advance

A merchant cash advance is an innovative SME finance solution that allows businesses to access quick working capital by selling a portion of their future credit card sales at a discount. They come in various forms, including traditional merchant cash advances and revenue-based financing.

Benefits

• Speedy access to cash: Obtain funds swiftly, often within days.

• Flexible repayments: Payments are tied to daily credit card sales.

• No collateral required: No need for assets or personal guarantees.

• Simplified approval: More accessible than traditional loans.

• Ideal for seasonal businesses: Cash flow aligns with sales fluctuations.

Use cases

• Seasonal businesses needing extra capital during off-peak periods.

• Restaurants and retailers covering inventory and staff expenses.

• Retail businesses renovating or expanding their physical locations.

• Service providers investing in marketing and advertising campaigns.

• Managing unexpected expenses or seizing short-term growth opportunities.

• Bridging cash flow gaps without resorting to traditional loans.

Commercial vehicle finance

To acquire the vehicles your business needs for its operations, you’ll want to consider commercial vehicle finance. It includes various options, such as commercial auto loans, leases and hire purchases, tailored to meet the specific requirements of commercial transportation.

Benefits

• Fleet expansion: Access funding for purchasing multiple commercial vehicles.

• Cost-effective financing: Competitive interest rates and flexible terms.

• Preserved capital: Maintain liquidity by financing without depleting cash reserves.

• Equipment upgrades: Stay competitive with modern, reliable vehicles.

Use cases

• Transportation companies expanding their fleet with new vehicles.

• Construction businesses acquiring trucks, excavators and heavy machinery.

• Delivery services investing in delivery vans and refrigerated trucks.

• Tradespeople upgrading their work vehicles, such as plumbing or electrical vans.

• Agricultural operations procuring tractors, combines and agricultural machinery.

• Businesses in need of commercial vehicles for daily operations or special projects.

Recovery Loan Scheme

The Recovery Loan Scheme is a government-backed initiative aimed at providing financial support to businesses, particularly SMEs, affected by the economic impact of events like the COVID-19 pandemic. It offers various types of government-backed loans to assist businesses in their recovery efforts.

Benefits

• Financial support: Access to loans designed to aid business recovery and growth.

• Government guarantee: Loan guarantees provided by the government, enhancing lender confidence.

• Flexible financing: A range of loan types to suit different business needs.

• Competitive interest rates: Favourable terms to make repayments more manageable.

• Capital injection: Funding for operational expenses, investments, and expansion.

Use cases

• Covering operational costs during economic downturns.

• Investing in new equipment and technology to stay competitive.

• Expanding business operations, including hiring staff or opening new locations.

• Managing short-term cash flow challenges.

• Renovating or rebranding to adapt to changing market conditions.

• Seizing growth opportunities in uncertain economic climates.

Refinancing

Commercial refinancing is a strategic financial move that allows businesses to replace existing loans with new ones featuring more favourable terms. Types of commercial refinancing include loan refinancing, debt consolidation, and asset and equipment refinancing.

Benefits

• Lower interest rates: Potential for reduced interest costs and monthly payments.

• Improved cash flow: Enhanced financial flexibility with revised terms.

• Debt consolidation: Simplify multiple debts into one, more manageable loan.

• Asset leverage: Access equity in assets for working capital or investment.

• Financial stability: Secure long-term financial sustainability for the business.

Use cases

• Reducing monthly mortgage payments through property refinancing.

• Consolidating high-interest debts into a single, more affordable loan.

• Refinancing equipment leases to reduce expenses.

• Leveraging property equity for working capital or expansion.

• Restructuring financing terms to align with business goals.

• Managing variable-rate loans by converting them to fixed-rate loans.

Summary

In summary, it's essential to understand the diverse SME finance solutions available to you for your company, whether it's through business loans, asset finance, invoice finance, merchant cash advances or specialised financial products. Each option offers unique benefits and use cases that can empower business growth and financial stability.

Getting started with SME finance solutions

If you're eager to grow your business, expand into new markets, regions, or product areas, and need the financial support to make it happen, we're here to guide you. 

At Millbrook, we understand that every business is unique. That's why we offer a range of tailored business finance solutions for SMEs to fit your specific requirements. Our goal is to simplify the application process, providing businesses with quick and easy access to the capital they need to thrive. With our support, you can take confident steps towards achieving your business objectives and securing a prosperous future.

Check your eligibility for Millbrook’s financing or learn more about SME finance solutions in our Ultimate Business Finance Checklist.

This resource covers various SME finance solutions and provides valuable insights to help you make informed financial decisions. Take the first step towards your business's future success now!