Business Finance

on the rebuildingsociety.com blog

10th Jun, 2019

Consolidate Debt for Business Growth

Growing a business is hard work. As you grow, you’re likely to need to access various forms of funding from equity to trade finance to loans to credit cards. Business loans are a great way to finance your business whilst maintaining control of your business. However, over time many businesses find that they they’ve taken out numerous loans or finance options and ensuring that monthly repayments are made on time, to many different providers, can become time consuming and expensive. 

Debt consolidation is a good way to restructure or simplify your financial arrangements for your business. This will help you improve your cashflow and reduce costs. If your business has numerous loans with different banks, a number of credit cards and other monthly debts, you should consider consolidating these into one easy to understand, easy to manage finance arrangement.

 Why consolidate business debts?

The long and short of it is – it’ll save you time, money and probably a few grey hairs!

A single repayment

Many will become one. If you completely consolidate your debt, you’ll only need to worry about one repayment a month, to one provider at a single rate. You can then match the timing of the repayment to best suit the cashflow needs of your business.

Reduced costs

If you have different finance options with different providers, you’ll probably be paying administrative charges to each of them, overdraft fees to Barclays, credit card fees to Lloyds, the list goes on. You’re also more likely to be paying higher rates of interest thank you can get elsewhere.

If you’ve taken out short term loans to support cashflow at one point or another and haven’t repaid those quickly, you’ll be paying much higher rates than if you repaid it and replaced it with a longer-term lower rate of interest loan.

Choosing one finance provider and using them over an extended period of time will help you improve your credit score with the provider, likely resulting in lower rates on future borrowing.

Improve Cashflow

Longer term loans often have smaller, more manageable monthly repayments than short term loans at high rates. Reducing the monthly outgoings in your business, will help you grow other areas of your business.

Is a debt consolidation loan right for your business?

If you have managed to grow your business or improve your credit score since taking out the original debt, you may be able to get a larger loan, at a lower rate over a longer term.

Signs you might be ready to consolidate debt:

  • Your business has grown
  • Your personal credit score has improved
  • Your business credit score has improved

More reasons you might need a business loan.

What to consider?

Before choosing to consolidate your debts, you should make sure that it is definitely right for your business and your plans for the business.

Cashflow or cost?

Think about why you’re trying to consolidate the loan? Is it to improve monthly cashflow or cost of the finance?

Consolidation does not always mean cheaper finance. If you consolidate your debts into a single long term loan you might be reducing your monthly repayments, meaning more cash in the business, but the rates might be slightly higher, costing you more over all.

Fees

When taking out a consolidation loan you’re likely to be charged an arrangement fee at the start of the loan. Make sure that you’ve considered the cost of the fee and whether it is right for your business at the time.

Early redemption options

Always make sure that you’re aware about whether you’ll be allowed to repay the loan early, and whether you’ll be penalised for doing so.

Business Debt Consolidation at rebuildingsociety.com

We’ve worked with many businesses that have come to us to consolidate their existing debts. When you take a loan with rebuildingsociety.com we’ll work closely with you to ensure that he loan you’re considering is right for your business. At rebuildingsociety.com’s you can consolidate or refinance loans that you already have with us or consolidate debts you have elsewhere.

The Benefits of a consolidation loan with rebuildingsociety.com

  1. No early repayment charges
  2. 6-60 month loan terms to suit you
  3. Single arrangement fee – no monthly costs
  4. We’ll settle existing debts directly with other providers on your behalf

Regardless of the reason for your loan with us, you can be sure that we’ll always consider your business on its merits and work closely with you to ensure the finance is right for you and your business. You’ll speak to real people that understand business and finance.

How to prepare your business for a loan.

You can apply for a business consolidation loan on our platform in under 5 minutes. If you’d like to speak to one of our team first simply contact us on any of the below options.

Phone: 0333 303 0972

Email: apps@rebuildingsociety.com

It was a pleasure to work with the team as we felt they took a pro active approach to our request for funding rather than the current lending criteria by many of the banking institutions who operate via a tick box and computer system.
The dialogue between ourselves and the team at ReBS has always been convivial and the out comes were of a positive nature.
” – Gary – SME Business Owner

18th Mar, 2019

Is a Peer to Business Loan an Alternative to a Bridging Loan?

Bridging Finance is a type of short-term, high-cost finance that is secured on assets such as property and is often used as a short-term solution with the intention of refinancing to an alternative lower-cost, long-term provider.

Typically, bridging loans are offered for periods of 1-18 months at 1.5% per month (18% pa).  Most bridging loan companies have expensive early repayment charges if you want to redeem the loan early.

This type of funding has become increasingly popular and there are many P2P lenders that focus on bridging loans.

Peer to Peer business loans vary in structure and rates depending on the platform, so we’ll look at a typical rebuildingsociety.com business loan.

Our loans are offered for periods of 6-60 months, at rates from 6% to 20% per annum (0.5%-1.6% per month). We offer secured and unsecured loans* and support a variety of British businesses. Unique (as far as we know) to rebuildingsociety.com however, is that we reward borrowers for backing their own loans with meaningful security.

Well secured loans benefit from interest rate discounts

Where a borrower offers good security in support of their loan, we will offer them a starting rate discount on their loan, the better the security the better the starting rate. Typically, a C rated business with no security would have a starting rate of 20% p.a however if they offered us strong security, they could benefit from a starting rate discount of up to 5%. An A+ rated business would usually have an unsecured rate of 10% but might, with good security benefit from a starting rate of just 6%p.a which is significantly cheaper than most bridging finance options. Find out More about our interest rate discounts here.

  Bridging Loan P2P Loan
Loan Term 1-18 months 6-60 months
Repayment Terms End of term Monthly Capital and Interest
Interest Rates 18% p.a 6-20% p.a
Early Redemption FeeYes No
Time to Raise Finance 5-14 days 7-20 days

What are the benefits of a rebuildingsociety.com business loan?

  1. There are no early repayment fees.
  2. We won’t call in the loan early
  3. You’re borrowing from a community of people that want to see you succeed.

Find out More

If you’d like to find out more about using rebuildingsociety.com as a cheaper bridging finance option, simply fill out our quick application process here and one of our team will give you a call or give us a call to discuss your options further.


13th Mar, 2019

An expansive approach from Afterthought

It’s always interesting to connect with business people with an eye for opportunity. A few words with Doug from Afterthought…

Hi Doug, how would you describe your approach to business?

My background is primarily IT consulting. I spent about 18 years working in the US with small stints in Hong Kong. My jobs allowed me to travel extensively and I think that helped with some of the input on our gin and coffee flavours and designs. I’m fairly hands-on, making sure that standards and values are followed and have built a great team of around 35 people across all of the businesses that continue to make Afterthought a success.

You seem to have quite a range of businesses, from technology consultancy to coffee shops… what’s the thinking behind this?

We started out as and IT consulting firm and decided to diversify into other businesses, we spotted a coffee shop for sale and it’s been expanding ever since!

The Gin Story … how did that begin?

As for the gin, I started drinking it about 7 years ago and settled on Bombay Sapphire and orange juice. About 2 years ago I toured their distillery and thought to myself I can make this and add some flair to it.

What’s the market like for Gin these days? Seems to me it’s quite experimental, I’ve seen Sheffield Gin in a local wine bar. Are you looking to provide direct to drinkers, or to bars as well?

We are aiming for about 80% export markets as there are already quite a few local gins in the UK. So far we have created and released 4 gins including American, European and London dry gins. 

Do you need a license to make Gin? What’s the score with the law?

So to get a license to make gin you have to have already made gin, kind of a catch 22.  Luckily for us we worked with a distillery in Devon to create our recipes and first batches in order to get our own licenses which were recently granted.

What other horizontals are you exploring for the future?

We are moving our smallest coffee shop site to a much larger building that will also house the front of our gin distillery, this allows us to host a gin retail section, a gin school and evening events. Next year we are adding a much larger European style cafe which will incorporate our gin, coffee and soon to be added pizza business in a new Burgess Hill revitalization project.

Thank you Doug, all the very best, a toast to your ongoing success.

View the borrowing application here.


01st Mar, 2019

Athena Catering Solution provided by Le Bureau Limited.

In industrial environment such as hospital and prisons, prisoners and patients need to be provided with nutritional meals. Prisoners need to be provided with five main options and sides and sweet options. Patients also need to be offered nutritional meal options.

Prior to presenting menu options to prisoners and patients, Athena our catering solution provides dietitians and catering staff with the ability to build model recipes and menus. Model recipes are defined in terms of their caloric, fats, proteins, vitamins, minerals, allergens, consumer acceptance, etc.  There are some forty elements that need to be considered in the analysis, including special menus to meet dietary conditions, vegetarians, vegans, allergen free, etc. 

Athena uniquely provides the facility to measure recipes and menus at the planning, preparation and serving stages.  

The issue that Athena addresses is that as ingredient suppliers and ingredients change, cooking methods change in recipes, athena provides an accurate measure as to how production recipes and menus meet model recipes. Hence alerting staff if the recipe and menus do not meet standards.

Athena can also determine at production level which recipe from a range of recipes meets the model recipes.  

Menus are presented to patients and prisoners with complete nutritional and allergen details so informed decisions can be met.

Meals in prisons are normally selected by prisoners two weeks in advance providing time for ordering and preparation. In a hospital same day selection, preparation and service occurs.

Athena uniquely provides several options for obtaining meal selections from prisoners and patients: paper and scan menus, tablet computers, smart phones (Bring Your Own Device), computers on wards.

Once the menu numbers have been collated:  meals are prepared, purchasing takes place, inventory pick and pack lists prepared, meal severed, receipting good in, etc. 

Athena provides a consolidated system that meets the needs of the whole catering process. From inventory control, recipe maintenance, menu planning, meals selection, meal preparation, serving meals, health and safety, cost control and purchasing. Athena provides a ful range of management reports and financial operational reports to monitor the catering operation.

The real beauty of the system is that it can be implemented in Schools, Colleges, Hospitals, Care Homes, Prisons, etc. it is a system which is highly functional, but can be adapted to any environment. The system architecture has been designed to meet individual client’s needs.  

The solution provided by Athena can also be extended to schools and colleges, home cares and chains of restaurants. Visit our lending application here:


13th Dec, 2018

Our Latest Business Borrower – Kadco Fashion

We caught up with Samir from Kadco Fashion & Textiles to find out more about his business and why he chose to return to the rebuildingsociety.com crowd to raise further finance to grow his Yorkshire based business.
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10th Dec, 2018

Lender’s Review of rebuildingsociety.com

Why Invest in Peer to Peer Lending?

Brian has chosen peer to peer lending as part of his investment portfolio as he enjoys the fact that crowdfunding and P2P lending directly connects lenders with the funders, cutting out the middleman.

Brian enjoys engaging with the business owners and seeing how he can have a direct impact on the success and growth of many small businesses.

Why rebuildingsociety.com?

Brian says that he enjoys lending via rebuildingsociety because of the platform’s ethos and dedication to supporting local businesses and developing local economies particularly outside of London, an ethos which he shares and which he has followed in his own business ventures.

Rebuildingsociety.com was founded with the intention of opening finance to businesses that had been excluded from traditional means of finance and to offer more than just a financial transaction, by ensuring that through the finance the business was also able to gain access to a wide range of lenders who are able to advise and support the business in the long term.

The ability for lenders to pick and choose their investments and continue to engage with the borrowers is a key reason Brian has continued to lend via rebuildingsociety.com, as opposed to other platforms that have become more ‘opaque’ in the way lenders invest.

As well as his rate of return, Brian also cites the openness and accessibility of the rebuildingsociety.com team as a factor for his continued investment via rebuildingsociety.com.

How does it compare to other platforms?

Investing across a number of crowdfunding and Peer-to-peer lending platforms, Brian, says as a ‘non-techie’ he has found the platform easy to use and understand.

He has found the blogs and information available to lenders on rebuildingsociety.com ‘excellent’ and very useful in helping him to understand how to use the platform, learn more about the businesses and get tips on lending in general.

Much of the information Brian refers to is available in our Lender Library.

Advice to new lenders?

Having been an active lender for over 4 years on rebuildingsociety.com. Brian says lenders should:

Read and Review

Brian says lenders should always make sure that they read up and carefully look into the platform that they are lending through.

Look at the trading history of the platform, how long have they been around, what is their net return, what is the ethos of the platform and what is the investment structure or the deals on the platform.

Knowing more about the platform and ensuring that you understand how it works is fundamental to ensuring the long-term success of your investments via P2P.

Do Your research

When investing manually, Brian says it’s crucial that lenders do the research on the businesses they are thinking of investing in. Reviewing the information provided by the platform as well as publicly available information is important to make good lending decisions.

Start small – Diversify

Brian says that lenders that are new to any platform should ‘start small’ and look to build a well-diversified portfolio, by lending across a range of sectors, regions and business types. As a lender gets more comfortable with the lending process and the platform then they can consider lending larger amounts according to the experience they have gained.
If in doubt ask

This applies to both asking questions of the borrowers as well as the platform’s team. On rebuildingsociety.com lenders are given the opportunity to directly ask questions of the borrower through the Discussion forums of each loan. This allows lenders to ensure they understand who and what they are lending for and allows them also to build a rapport with the borrower.

Brian also says that lenders should ask not to be shy to engage with the rebuildingsociety.com team, who he has found ‘very helpful and accessible’ and ‘has found the guidance that they give very easy to understand’.

 

rebuildingsociety.com is authorised and regulated by the Financial Conduct Authority and has been operating as a peer-to-peer lending platform for over six years, making it one of the longest standing P2P platforms in the UK. rebuildingsociety.com prides itself on the level of transparency offered to lenders and the wealth of information and educational material available to assist lenders and borrowers throughout their engagement with the platform. 

Transparency helps lenders assess the risk and make better-informed decisions if you would like to find out more about the risks involved in lending on our platform, visit our risks page.


03rd Dec, 2018

Scale Up Programme to Accelerate Growth of rebuildingsociety.com

Rebuildingsociety.com is proud to have been selected to be part of the 2019 Barclays Scale Up programme, run by Barclays in collaboration with Cambridge Judge Business School. The innovative programme aims to enhance the performance and competitiveness of high-potential businesses with growth appetite as well as growth potential that are deemed to be engines of growth in the UK. (more…)


26th Nov, 2018

Advice to Borrowers – From a Lender

Tips for Raising P2P Finance

Brian Johnson has been a regular lender on rebuildingsociety.com since 2014, supporting many UK SMEs in their growth aspirations along the way. Brian also has many years’ experience of managing and running his own businesses, so understands the difficulties businesses encounter in raising finance and has seen how businesses can use P2P finance to their advantage and how rebuildingsociety.com facilitates more than just a business loan.

We met up with Brian to find out what tips he would give businesses who are looking to get a business loan through rebuildingsociety.com.
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06th Nov, 2018

Festive Preparation for Your Business

With the Bonfire smoke clearing and the sound of fireworks still ringing, in our ears many people now turn to Christmas preparation and celebrations. Whilst the upcoming festive season brings with it plenty of fun and reasons for celebrations, it is often a challenging time for business owners, particularly if planning hasn’t been done to ensure business continues as normal through this disruptive period.

We’ve put together a list of tips to help you ensure that you make the necessary arrangements to avoid disruption to service or unexpected issues during the festive period and to ensure that you set your business up for the best possible start to 2019!
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29th Oct, 2018

Changes to Our Auto Bidding Tool – BidPal

We’re excited to announce the most recent changes to our auto bidding tool, BidPal.For years lenders have used BidPal to help them manage their Rebs lending portfolio, helping them invest in a wide range of loans whilst saving them valuable time, and now we’ve improved it to make managing your lending account even easier and to allow you to make more tailored auto lending decisions.

What is BidPal?

BidPal is our automated lending tool, that auto applies bids on behalf of lenders as and when a new loan is listed that meets their pre-set lending criteria. This means lenders that have set up BidPal do not need to log in each time a new loan is listed to make a bid.

What’s New?

 

 

Inclusion and Exclusion Options

Previously the preferences available for lenders to set were limited to industry sector and risk rating. We’ve now extended the options available to lenders, allowing you to make more defined bidding preferences to suit your lending appetite.

You will now be able to choose to include or exclude certain regions that you do or do not want to lend to.

Bid or Buy

The new BidPal will also include an option to auto-buy loans on the Secondary Marketplace as well as bid on the Primary Marketplace. Lenders may choose to set one or the other or both auto-bidding options.

Where a lender chooses to buy micro loans from the Secondary Marketplace, they will be buying micro loans that other lenders are selling on. These are loans that have already been funded via the Primary Marketplace. When loan parts become available that match your buying preferences and where you have sufficient Available Balance, these micro loans will be automatically bought and added to your loan portfolio.

We’ve also introduced new rules that  allows users more flexibility over their BidPal criteria. Over time, we hope to further expand on the data options that a lender can set for their lending rules.

Currently lenders can configure the settings such as:

  • Whether you want to exclude / include loans where the loan is behind on repayments
  • Targeting the purchase of micro loans in a specific business
  • Whether you want to exclude / include loans being sold at certain premiums / discounts by other lenders
  • Choosing the risk ratings you want to buy or avoid.

The buy logic is triggered when a user sells their microloan(s), there is now a ‘clearing process’ to check if the microloan meets the buy requirements of another user and where it does, the purchase will occur instantly. This feature allows lenders to grow a diversified portfolio quickly while simultaneously bringing an increase in liquidity to the platform. When selling microloans, you may notice a message “1 of 1 microloans sold.” When you see this, another lender’s BidPal Buy function has purchased your microloan automatically.

 

 

What BidPal Does Not Do…

BidPal does not guarantee that all your funds will always be lent out, that you will never encounter a default or that your account will deliver a set interest rate.

Available funds are only lent out to a pre-set proportion of your lending portfolio, you can alter all this in the settings.

If your funds are auto bid on a loan, there is no guarantee that you will not be outbid, if you are outbid you will be alerted (according to your notification settings), and will be able to login and rebid should you choose.

Lending to businesses carries the risk of default. If a business fails to repay a loan you could lose all or part of your capital. Therefore you should carefully consider how best to mitigate these risks, consider perhaps divesting via the secondary market or reviewing the performance of the various loan risk ratings and reviewing your Bidpal settings regularly.

Whilst BidPal will auto bid at the highest rate available on a loan, it does not guarantee a set return on any single loan or on your portfolio.

Managing your Lending Portfolio

As a lender, lending to businesses, you should be aware of the risks involved in lending. Understanding the risks is the first step to building a strong loan investment portfolio through careful management.

Whilst BidPal reduces the need to log in as regularly to ensure that your funds are working for you, lenders should still ensure that they are monitoring their lending account to ensure that it is performing to their expectations and to regularly review their investment strategy depending on the performance of their investments.

Find out more about managing your lending portfolio on our platform by reading our helpful articles in the Lender Library.
For more information on BidPal please look at our FAQs or email support@rebuildingsociety.com.

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