Broker Trends and Opportunities – January 2025

Empowering Trading Business Clients:
New Year Cash Flow Solutions

Advising with empathy and understanding their requirements are key to supporting clients, especially in this economic environment. Cash flow conservation is a matter of survival for business owners and directors, ensuring the doors stay open and opportunities can be acted on.

While age-old tricks like chasing receivables and cutting costs are tried and tested, the post-pandemic, post-cost of living crisis economy demands new urgency to review their cash flow management. 

Businesses can\’t rely on last year\’s plans; factors like stubbornly high interest rates and wage growth inflation make adaptability crucial.

So, how can you help clients conserve cash while navigating overheads and any delays in banking income? Some may find quick solutions with available commercial finance products and tools, while others might reluctantly turn to financing for the first time.

Recent experiences highlight cash flow as the lifeblood of businesses. Maintaining or expanding requires sacrifices, but with the right tools, your clients can spread costs and regulate income effectively.

We\’ll explore commercial finance products that can help your clients conserve cash and afford to take on new opportunities.

Commercial Property Refinance

Does your client\’s business own commercial property with or without an outstanding mortgage? They might have equity in their property.

For trading businesses, commercial properties are often owner-occupied, but some also lease out commercial properties to other companies. Refinancing commercial property can conserve cash flow in several ways:

Investing in the Future

• Improving Interest Rates: Refinancing an existing mortgage can lower interest rates, reducing outgoings. It may also offer fixed-rate protection for a specified period.
• Raising Funds: Refinancing can raise additional funds over an extended period (15–25 years) at better interest rates compared to short-term business loans.
• Interest-Only Repayments: Switching to interest-only repayments reduces monthly mortgage payments, with options for annual overpayments without penalties.

We work with lenders who can also consider residential and buy-to-let properties as security for business loans. While not suitable for everyone, this can significantly improve your client\’s cash flow compared to short-term unsecured business loans.

Receivables can Regulate Cash Flow – Invoice Finance

Invoice Finance may not always be the perfect fit for a business at every stage of the economic cycle. However, in the current environment, it offers a unique advantage: it pays for most of the work completed just a few days after it\’s done, even when customers won\’t settle for another 30, 60, or 90 days.

Without this immediate cash flow, businesses must cover wages, contractors, overheads, and suppliers. If there\’s an opportunity for more work or new projects, will they have the cash flow to seize it now, or will they have to wait until existing customers settle?

This clearly demonstrates the ends justifying the means. Many businesses might struggle without these facilities in the current economic climate, and Invoice Finance could be one of the best cash flow conservation tools available.

Trade Finance

Depending on the nature of their business, companies will either buy raw materials to manufacture or assemble finished goods or purchase ready-to-deliver finished goods from suppliers.

Trade Finance can support transactions with UK and overseas suppliers, and these lenders are often experts in FX as well.

Having a trade facility backing can help your client\’s business improve prices and terms by enabling earlier payments. Trade Finance facilities are flexible, accommodating deposits on orders and other costs like import VAT and shipping.

In the current environment, conserving cash within the business is crucial as working capital can become strained. Funding the acquisition of pre-sold goods or materials for stock ensures that vital cash remains in the business to cover fixed overheads and unexpected liabilities or opportunities.

Lease or Hire Purchase Over Buying For Cash?

In the current economic environment, businesses can\’t afford to stand still. When considering new or replacement vehicles, clients can conserve cash and leverage smart finance.

We work with expert partners to source the most suitable Lease or Hire Purchase (HP) deals for commercial clients. Whether it\’s new or used vehicles, a single vehicle or an entire fleet, using the right finance is a smart choice. Conserving cash within a business is crucial, especially with the uncertainties ahead.

Additionally, finance options can be tax-efficient and environmentally friendly. There are various CO2 emissions bands that offer increased offsets against profits for lower CO2 output vehicles. Clients should consult their accountants to fully understand the benefits.

\’Full expensing\’ tax relief should be explored for new vehicle purchases. This scheme provides 100% relief on qualifying capital expenditure against corporation tax liabilities.

Asset Refinance

Your client\’s business may have hard or soft assets or stock with significant equity that can be leveraged to generate much-needed cash flow.

We partner with Asset Finance and Asset Based Lenders to help clients access the cash locked up in their existing assets.

As your trading business clients plan their budget and cash flow for 2025, now is the perfect time to introduce them to commercial finance products they may not have considered. These tools can be the key to navigating the challenges and opportunities of the coming year.

By supporting your clients with empathy and a deep understanding of their unique issues, you can add significant value to their business.

Reach out to us today to explore how we can help you empower your clients and drive their success in 2025 and beyond.

Mark Grant, Managing Director, Fiducia Commercial Network.
January 2025.

About Fiducia Commercial Network

Fiducia Commercial Network is a commercial finance \’Appointed Representative\’ network created to allow independent firms to provide commercial property finance and trading business finance options to their existing client base and network.

Joining the network provides opportunities for professional brokers to offer a full range of commercial finance solutions by acting as an Appointed Representative (AR) with the full support of the Fiducia Commercial Network team.

The Fiducia Commercial Network membership includes FCA authorisation and reporting, PI insurance, and NACFB membership, plus business, compliance, finance, system, and admin support from a company with over 20 years\’ experience in commercial finance.

If you\’d like to discuss joining Fiducia Commercial Network or you\’d like to apply to become an Appointed Representative…

SPEAK TO OUR TEAM

To discuss Fiducia Commercial Network or to apply to become an Appointed Representative email the team via by clicking this link.

For all media and marketing enquiries contact –  pr@fiduciagroup.co.uk