I’ve been speaking with a number of accountants in the UK about some of the challenges their customers are facing. While these accounting firms service a wide range of clients with differing needs and circumstances, two themes resonated, regardless of client size:
- collections & cash flow continues to dominate business owner focus; and
- financing is viewed as a hurdle to be overcome, rather than a basic business right.
Here’s why I think Bilbus can make a big difference to unlock lending to businesses:
Half the challenge for many businesses selling to larger customers is working out when you will need cash. Chasing up invoices and waiting to get paid is a pain businesses deal with daily.
Some large customers take a while to confirm when they will pay, others are fairly prompt in confirming. Once you know you are going to get paid, some of the pressure is eased. But, if you have to pay out cash in the interim (little things like payroll, the rent, your own suppliers) you still need to juggle and find the cash.
Some businesses have a finance person who uses a spread sheet to track all this. Others outsource to their accountant who uses an accounting package. Someone still has to call, email or write to the buyer to get status updates on the invoice.
- Bilbus changes all that. We help you send and track your invoices electronically, and update your dashboard with invoice status and also help you work out when you will need cash. Enter in your expenses, send your invoices and see a simple snapshot of your cash flow.
The other half of the challenge is finding the money once you’ve realised you need it.
Many businesses have found when the approach their own bank for an overdraft or loan facility, that they don’t meet the collateral and risk profile. So, either they accept an overdraft that is a fraction of their sales (a big UK bank recently caused a stir with a 10% blanket rule), find a lot of collateral, or go elsewhere. And then the fun begins.
Maybe the accountant knows a few lenders and sets up some meetings. Problem is, that well in to the meeting both the business and the lender realise there is no fit – maybe the lender does not like the business area, or finds the operation too ‘risky’, or the business is too small/too big. Lending criteria change quite regularly, as do bank managers. Your accountant won’t always know what is going on at bank HQ or what the latest targets for your region are.
Whatever the reason your lender conversation did not work out, you move on to the next meeting and so on. And if there is some interest, you have to fill out a separate application for each lender. And each one asks for information in a different order. That means copying, collating, answering the same questions. All of this while chasing invoices and running your business.
- Bilbus changes all that too. We help you create a finance request once, upload all your supporting documents and allow you to grant access to your files online. But most importantly, we match you to lenders so you are only speaking to lenders whose lending criteria match your circumstances. No more time wasted talking to the wrong people.
So, we make it simpler for businesses to work out when they need cash, and then make it easier to find that cash by matching them to lenders. And when they want to work out what financing option makes more sense, Bilbus has some tools that help.
And we make it easier for lenders to lend by ensuring they have a good understanding of the business, while reducing effort the business has to go through to provide all the necessary information. Of course, we simplify a few more things, like import and export from accounting systems, not to mention automating collections tracking so businesses know which customers need a phone call or a ‘friendly’ visit.
And once a financing is in place, keeping lenders updated can become a simple and painless task – businesses upload latest financial statements and relevant information to Bilbus and lenders can see what they need in their Bilbus dashboard before a borrower/customer visit. Hence, lender meetings become more productive and focus on the future rather than paging through documents.
The result of all this? Wider financial choice and more time to spend with customers and growing the business. Government guarantee schemes, lending targets, new sources of lending, will all have more impact if we can get the basics right. Simplifying the borrowing-lending experience with a combination of easy to use web applications and an update to the way we think about and manage working capital.
The original blog post can be found at http://blog.bilbus.com/2012/02/14/how-bilbus-can-unlock-business-lending/.
Bilbus is a working capital financing hub that helps small businesses invoice, collect and match to commercial lenders via a single dashboard. We help businesses use invoicing and collections data to increase cash flow visibility and strengthen credit applications. Get paid faster, borrow smarter: e-Financing for the e-Invoicing generation.