Business finance is constantly evolving. It can be a real challenge for business owners and for the accountancy profession to keep up with the latest challenges that need to be overcome and solutions that need to be implemented.

Accountants are uniquely placed to help their clients find the funding they need to grow, thrive or simply survive. Here we’ll take you through some of the key obstacles to look out for when finding funding for your clients.

No two businesses are the same

While the principles of business finance might be constant – assessing the bottom line – this isn’t always the right approach to getting your clients the funding they need. It often makes more sense to consider the specific circumstances finance. A straight-up business loan might not be the right option for businesses that are, for example, based on invoicing customers or rely heavily on card payments.

The good news for you and your clients is that there’s a plethora of business finance options and providers out there waiting to find businesses to fund. The key is in linking up the businesses with the providers.

Affordability

Lenders will often look at a business’s turnover in their affordability assessment. Businesses should generally be able to borrow 10-25% of their annual turnover for a loan, and while the nitty gritty (for example term length, interest rate) will vary from lender to lender, that’s a good gauge to predict how much your client will be able to borrow.

Some lenders will focus more on profitability rather than turnover, so make sure you and your client have a good grasp on both and can submit whichever is needed when the time comes.

Be proactive

You can add value to the services you offer by being proactive with your clients’ businesses. Noticing cash flow issues or recognising new approaches to help the growth of their business will give them fresh and potentially very valuable insight and direction. Regularly meeting with your clients to make sure you’re up to date with their accounts and to discuss business growth will help you to help them make a success of their business, and strengthen your relationship with them.

And be ready!

One aspect of finding funding applies to all businesses and accountants. You and your client need to be prepared to provide the documentation lenders need to assess an application. It should be common practice for businesses to keep their records and reports updated, but we know from experience that it’s not always the case – and it can really hold a business back when they’re looking for funding.

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