Taking out a business loan is a common way of financing a new business or the growth of an existing one – but there are key considerations that borrowers and lenders will have to make.
I can’t repay my loan – What will happen now?
If you are unable to pay the sums due to a lender in accordance with the terms of a loan agreement, the outcome will largely depend on:
Understanding the risk – Certificates of independent legal advice
Entering into a financial loan agreement or granting security/guarantee creates legal obligations to comply with the terms of the agreement – with potentially significant risks for those liable if repayments are not made.
Barclays, Lloyds Bank, NatWest and more approved to offer finance under Recovery Loan Scheme
Barclays, Lloyds Bank and NatWest are among the 19 accredited lenders to offer finance under the landmark Recovery Loan Scheme (RLS), it has been revealed.
What happens if my customers are not paying me on time?
Worrying research from PayPal and Xero has revealed that 37 per cent of small business owners have considered closing their company because of cash flow issues caused by late payments.
The research highlights the scale of the late payments challenge that British businesses face, who are owed an average of £23,360 in overdue invoices and are having to wait on average 14 days after the due date to be paid.
The news comes at a time when reports continue to emerge concerning the UK’s so-called ‘late payments crisis’ – a problem which is becoming more and more widespread as the years go by.
According to up-to-date figures, more than a quarter (26 per cent) of small firms have been forced to wait between three and six months for invoices to be paid, while a further 10 per cent have encountered clients who have never paid them at all.
What impact can late payments have on a business?
Late payments can have a number of worrying implications for small and medium-sized enterprises (SMEs) – causing cash flow complications and eating up business owners’ time, leaving them chasing unpaid invoices instead of focusing on the day-to-day running and development of their businesses.
In the worst cases, unpaid invoices can force a once-prosperous firm into financial difficulties.
Late payments often build up rapidly and lead to disastrous consequences, so prompt action is advised.