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  • Writer's pictureMatt Bowler

Commercial Finance and the cost-of-living crisis

Updated: Aug 10, 2023

As we start to settle into the new year, many have been checking their bills and are far from delighted about what they are seeing. We are now truly into the cost-of-living crisis. With a crisis this impactful across the UK from both a personal and business point of view, we all face uncertainty.

With uncertainty comes panic from both your suppliers and customers, this panic may turn into issues with cash flow. That’s why, many businesses are turning to strategic forms of cash flow conservation.

Now, you can go with the traditional forms of cash flow conservation, such as cutting costs and chasing unpaid invoices, but with the cost of living in its current state, these tactics are become more and more difficult.

So, why not consider looking into alternative financial strategies to survive during 2023. Here are some of our top suggestions.

Business Loans

Simple enough to explain but do you know the type of loans available to you?

Secured Loans – The lender takes a guarantee to back the loan, which is normally a tangible asset that a company owns like property, machinery or vehicles.

Unsecured Loans – With no tangible security backing the loan, these are riskier for lenders – and this is normally reflected in a shorter term and higher interest rate.

Revolving Credit – Similar to an overdraft, you agree a facility limit and term and can ‘dip in and out’ depending on your needs. You only pay interest on the funds that you draw down.

Merchant Cash Advance (MCA) – Using the regular income from Debit / Credit Card transactions to help fund business borrowing, helping to smooth income in seasonal markets. No fixed loan repayments, your repayments are tied to the volume of business you take through card transactions.

Short Term VAT Loans – Lenders offer 12-week loans to help to settle some or all of your VAT bill – you can repay weekly or monthly

Invoice Finance

This is one of the cash flows examples we suggested earlier but with more control of credit. Invoice Discounting is the usual go to form of Invoice Finance. This is when you keep charge of credit control and get paid up to 90% of your invoice’s value on the day that you issue it to your customer, with the balance when they settle.

You can also look into Invoice Factoring. As per Invoice Discounting, plus the lender manages your credit control – this can free up your time to get on with running the business.

You select either the clients or the individual invoices to put into invoice finance, so you only use the facility when your cash flow requires it.

Trade / Supply Chain Finance

Trade / Supply Chain Finance is a revolving facility that can be with UK based suppliers and manufacturers as well as overseas, is flexible to accommodate deposits if required on order and other costs including import VAT and freight if these are applicable to you. And if it is from overseas, then lenders are also commonly experts in FX as well.

Asset Finance / Vehicle Leasing

Asset Finance gives your business access to the machinery, plant, equipment or vehicles that it needs to operate, without the full initial outlay of their cost. It can also release value from assets that you already own towards working capital and cash flow requirements:

  • Leasing Finance – Your business doesn’t own the asset but agrees a lease usually for a fixed term and payments. You are in effect renting the asset.

  • Hire Purchase (HP) – This allows your company to purchase an asset over an agreed term with agreed regular payments – the asset is yours when all of the agreed payments have been made.

  • Refinance – In simple terms, your company may own assets that are either unencumbered or partially financed. Lenders will commonly lend up to 70% of their current value less any outstanding finance.

As business finance consultants we can help you find the solution that’s right for you. We have access to whole of market commercial finance products, often not available direct, meaning we always find the most suitable product your needs.

To find out more, why not drop us a line at

Or give us a ring at 0333 339 5905



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