Let’s say you need some quick cash to meet your immediate business needs. You might need new stock, new equipment or you might just need to keep your cash flowing.
If this is the case, it’s all too easy to fall into a catch-22 situation: Your business cannot continue to turn a profit without this cash, but you cannot secure this cash until your business has turned a profit.
So what do you do?
This situation can be particularly frustrating if you know that you’ll have money coming in soon. You might find yourself scrutinising your invoice just wishing it were possible to access this money now.
Well that’s exactly what you can do with a block discount loan.
A block discount loan is a secure and cost-effective means of instantly releasing capital from a financial agreement or contract that has a guaranteed future income stream. This capital is then paid back at a fixed price over a fixed period of time – usually for as long as the underlying contract is set to last.
The underlying contract itself is unaffected, so there’s no need to worry about upsetting your relationships with your clients and customers. On a completely undisclosed basis the rights of the underlying contract are sold under a master agreement. Meanwhile customer rentals are billed and collected as normal.
The Many Benefits of a Block Discount Loan
One of the main benefits of a block discount loan is that the cash advance is immediate and released directly into your business. You’re then free to benefit from a steady stream of funds towards your future growth safe in the knowledge that your business will have no trouble at all making the repayments. They’ll only continue for as long as the underlying contract or rental period, so you can rest assured that the means of repayment will always be there.
Another major benefit of block discounting is that any financial arrangements made are designed to complement existing banking facilities and relationships rather than complicate them. A block discount loan is a means of restoring cash flow through returning a fixed proportion of your outlay. It’s more secure, more efficient and more cost-effective than a standard bank loan.
Indeed you might even think of block discounting as nothing less than a whole new income stream. They enable you to reinvest your capital and to make a profit in the period between lending and funding.
If you have any more questions concerning block discount loans, or any aspect of commercial finance, contact one of our experts today on 0333 358 3502.