With recent figures revealing SME lending levels rose by 15% during the first quarter of this year, business experts have revealed how to choose the right financial product for your business.
There are plenty of financial products available that cater to small business owners and their specific needs, with business credit cards being one of the most popular choices.
It can be difficult to know where to start when choosing a business credit card provider and a specific card.
To help, Kyle Eaton, money.co.uk business credit cards expert, shares his tips on choosing the right financial products for your business:
“Every business needs cash to get off the ground and pay the bills, from establishing a workplace to buying essential equipment. With so many options to consider, choosing the right financial products can be a difficult decision. With this in mind, here are some tips to help you make the best choice for your business:
Assess your business needs
“Before you start looking for the right product, make sure you fully understand your business’s finances. Start by looking at your current financial situation, including:
- Cash flow
- Growth projections
- Upcoming expenses
- Debts
- Assets
“Assessing these factors allows you to understand what you need and compare the right financial products for your needs.
Know your goals
“It’s important to identify what you want to achieve with any financial products you’re considering. Consult your business plan, or write one up if you haven’t already done so. This should include financial forecasts so you know how you’ll use the product. Knowing your goals will help you narrow down the options for choosing the right product for your business.
Do your research
“Plenty of financial products are available and research is key to understanding which is right for you. Look into each option thoroughly to get to grips with:
- Reward programmes
- Fees
- Interest rates
- Customer reviews
- Eligibility criteria
“Each product will offer a different fee structure, so check any charges for the product you’re considering. You should look at the APR, as a lower APR can save you money on interest charges.
Seek professional advice
“If you’re unsure about choosing the right financial product, ask an expert for advice. Financial advisors and accountants have the expertise and experience to help you understand the complex world of business finance.
“They can assess how healthy your business finances are and what your needs are. They’ll then be able to give you personalised guidance, taking into account your industry, business size, cash flow, and risk tolerance. This can give you valuable insights into your options and minimise any risks you might face to help your business grow.
Read the fine print
“Before you commit to a financial product, make sure you take the time to read and understand the terms and conditions outlined by the provider. Look for any restrictions or clauses that could potentially be pitfalls for your business in the future. Pay attention to the repayment terms, including frequency of payments and grace period for repayments.
“Finding the right financial product for your business means carefully considering many different factors. By looking through these factors and getting professional guidance when you need it, you can make the process easier.”
