How Prepared is your Business for an Emergency?

How Prepared is your Business for an Emergency?

Emergency fund

Ever thought about what could happen if your business were to run into an emergency? Although being your own boss can be very rewarding and exciting, emergencies can catch you off guard when you least expect it. If you’re a small business owner with limited cash reserves, acquiring the means to resolve any potential issues can be particularly stressful and difficult to achieve.

Late payments

No matter which sector you’re in, late payments can be problematic. The strain that places on your finances could affect your ability to accept new contracts, support staff wages, pay energy bills or complete existing projects. Unchallenged, this could eventually lead to a loss of potential earnings, dissatisfied customers, diminishing supplies and declining sales. However, applying for a short-term agreement such as Invoice Finance could be the answer. If your business trades using business to business (B2B) invoices, you could release up to 90% of the cash tied up in any invoice worth in excess of £5,000. Plus, the funds that you could receive can be used for a wide range of purposes, including trading overseas.

Repairing and replacing equipment

In order to offer a dynamic and versatile array of quality services, making sure that your business has all the equipment it needs is essential. It’s an area that you can’t afford to hold back on. But no matter where your business stands in its development, the strain that this puts on your finances can be too much for you to handle alone. Luckily, you don’t have to. Two of the most popular means of acquiring equipment for your business are Leasing and Hire Purchase.

  • Leasing: allows you to borrow equipment from a supplier over an agreed term, during which you’ll be required to make fixed monthly rental payments, plus interest. This can usually extend up to 5 years, but could be increased 7 years for particularly valuable equipment. Once the agreement matures, you can either: return the equipment, extend the agreement or upgrade to another model.


  • Hire Purchase: offers your business the means to eventually gain ownership of a piece of equipment, providing you keep up with the fixed monthly repayment scheme, plus interest. After the lender purchases the equipment your business requires, you must pay an initial deposit. Subject to negotiation, this is comprises 100% of the equipment’s VAT and an agreed percentage of it equipment’s total asking price. As soon as this has been paid you can begin making full use of the equipment. Once the agreement matures, with all relevant payment settled, ownership is transferred over to you.

Seasonal revenue shortfalls

For many UK businesses, keeping a lid on seasonal cashflow shortfalls isn’t easy. Although it’s possible to predict when you may experience a shortfall, depending on your sector, this doesn’t excuse the sheer amount of pressure that this can put your business under. But rather than allowing your business to fall behind in its financial obligations, applying for a short term finance could be solution.

A popular way in which many business owners tackle this issue is with the aid of an Overdraft Replacement (also referred to as a Revolving Credit Facility). Offering your business a line of credit, Overdraft Replacement works very much like a credit card in that you gain access to allowance. The amount of money that you can drawdown from this allowance is subject to a credit limit that’s determined by your business’ past earnings. Although you’re not obligated to drawdown any of the funds that are made available to your business, anything that do withdraw will be charged interest, and be fully repaid within 30 – 90 days (depending on the agreement). But, should you withdraw more than what you’re allowed, your business will be charged an overdraft penalty. Once any of the funds that you’ve drawn have been repaid, you can go on to withdraw them again on a revolving cycle.

Premises damage

Whether you own or rent a premises, making sure that you’re able to welcome customers into your business is essential. However, you may on occasion run into issues that could affect your ability to do so. As well as conducting urgent refurbishment work, your premises could fall victim to vandalism or a natural disaster. Yet, regardless of whatever the reason may be, getting your business trading again is vital.

Although, depending on the situation, you may decide to make a claim with your insurer, it can take up to 90 days for funds to be released. If you can’t afford to wait that long, you could receive an advance in as little 48 hours by applying for a Merchant Cash Advance. A Merchant Cash Advance provides your business with an advance based upon your predicted card sales, which carries no usage restrictions. This form of finance also features flexible monthly repayments that only take an agreed percentage from each of your credit and debit cards sale until the agreement is repaid, excluding cash payments.

Is your business prepared for an unexpected emergency?

Although it’s difficult to predict what challenges your business may encounter in the future, making that sure that you have a plan in place to resolve them as and when they arise is a necessity you can’t ignore. But for many UK business owners who seek to pursue to their goals in confidence, the support they require to overcome any eventuality comes from applying for business finance. All you need to do is source a finance solution that’s appropriate for your business’ objectives.