Author: Jade Donno

start-up loan newspaper

Your guide to start-up funding

Posted on | by Jade Donno

Navigating the Seas of Start-up Funding: A Guide for UK Entrepreneurs

In the dynamic business landscape of the UK, start-up funding emerges as a beacon of hope and opportunity for aspiring entrepreneurs. The journey of building a business from scratch is exhilarating, yet it’s strewn with challenges, the foremost being financial. Understanding why startups need funding and how to access it efficiently is crucial. Here, we delve into the essence of startup funding and conclude with how 1 Accounts, in partnership with Swoop, plays a pivotal role in this crucial phase of business development.

The Lifeline of Start-up Funding

Seed Capital

The initial phase of any business requires seed capital. This early funding is crucial for market research, product development, and setting up a base of operations. Seed capital helps in transforming ideas into viable business models.

Operational Costs

Running a business involves a myriad of operational costs including rent, utilities, salaries, and marketing. Start-up funding ensures that these bills are paid while the business is still growing its customer base and revenue streams.

Growth and Scaling

Once a startup is off the ground, the next step is growth. Funding at this stage is used for expanding product lines, entering new markets, or scaling operations to meet increased demand.

Buffer Against Uncertainties

The business world is unpredictable. Having financial backing gives a startup the buffer to withstand market fluctuations and unforeseen challenges without derailing its operational capabilities.

Innovation and Development

Continuous innovation is key in staying competitive. Funding enables startups to invest in research and development, ensuring they remain at the forefront of technological advancements and market trends.

Types of Start-up Funding

Start-ups can explore various funding avenues, each with its own merits:

  1. Bank Loans: A traditional form of financing, offering a straightforward approach to borrowing with defined repayment structures.
  2. Government Grants: These are often sector-specific and can provide non-repayable funds for startups meeting certain criteria.
  3. Angel Investors and Venture Capitalists: These entities not only provide financial backing but also valuable expertise and networking opportunities.
  4. Crowdfunding: An increasingly popular method, of leveraging the power of the community to raise funds in exchange for product pre-orders, equity, or rewards.
  5. Bootstrapping: Self-funding from personal savings or revenue, offering complete control but limited by personal financial resources.

Embark on Your Funding Adventure with Confidence

Securing start-up funding is a critical step towards realising your entrepreneurial dreams. With 1 Accounts and Swoop, navigate these waters with a trusted partner by your side. Start your adventure with confidence; contact us today to explore how we can elevate your startup to new heights.

HMRC Time To Pay Arrangements

Posted on | by Jade Donno

Navigating HMRC Time to Pay Arrangements: A Lifeline for UK Businesses

In the complex world of business finance, one of the challenges UK businesses often face is managing their tax obligations effectively. The HM Revenue and Customs (HMRC) understands that businesses sometimes encounter cash flow difficulties, making it hard to pay their tax bills on time. To assist, HMRC offers a “Time to Pay” (TTP) arrangement, a vital tool for businesses needing extra time to pay their taxes. This blog explores what TTP arrangements are, how they work, and why they might be a critical solution for your business.

What is a Time to Pay Arrangement?

Simply it’s an agreement between a business and HMRC to pay outstanding taxes over an extended period. This facility is designed to help businesses struggling with temporary financial difficulties to spread their tax payments, thereby avoiding penalties and helping to manage cash flow more effectively.

Eligibility and Application

To be eligible for a TTP arrangement, businesses must:

  • Have existing tax liabilities.
  • Be in genuine temporary financial distress.
  • Be able to demonstrate that they can pay off the debt in the foreseeable future.

The application process typically involves contacting HMRC, discussing your financial situation, and proposing a payment plan.

Types of Taxes Covered

TTP arrangements can cover various types of taxes, including:

  • Corporation Tax
  • PAYE and National Insurance Contributions
  • VAT
  • Self-Assessment Tax

The Benefits of Time-to-Pay Arrangements

Cash Flow Management

One of the primary benefits of a TTP arrangement is improved cash flow management. By spreading tax payments over a longer period, businesses can maintain operational liquidity and avoid the strain of a lump-sum payment.

Avoiding Penalties

Timely negotiation of a TTP arrangement can help businesses avoid late payment penalties and interest charges, which can accumulate quickly on unpaid taxes.

Maintaining Good Standing

Staying compliant with tax obligations is crucial for any business. A TTP arrangement helps maintain a good relationship with HMRC and ensures compliance.

How to Approach a Time to Pay Arrangement

Early Communication

It’s crucial to contact HMRC as soon as you anticipate cash flow problems. Early communication is key to negotiating a feasible and realistic payment plan.

To set up a Time to Pay (TTP) arrangement with HMRC, you can use the following contact details:

  1. For Self-Assessment: Call 0300 200 3822. The Self Assessment Payment Helpline is open Monday to Friday from 8 am to 6 pm.
  2. For Limited Companies: Contact HMRC’s Payment Support Services on 0300 200 3835.

Accurate Financial Information

When negotiating a TTP arrangement, be prepared with accurate and detailed financial information to support your case. This includes cash flow forecasts, business plans, and an explanation of what caused the financial difficulties.

Realistic Proposals

Propose a payment plan that your business can realistically meet. Overly ambitious plans that lead to default can complicate future negotiations.

HMRC’s Time to Pay arrangements can be a lifeline for businesses facing temporary financial difficulties. They provide a structured and manageable way to meet tax obligations without crippling the business’s cash flow. However, it’s essential to approach these arrangements with a clear understanding of your financial situation and a realistic plan for repayment. Regular communication with HMRC and adherence to the agreed payment schedule are critical to the success of these arrangements.

For businesses struggling to manage their tax liabilities, a TTP arrangement can offer the necessary breathing space to regain financial stability. Always consider seeking advice from an accountant to navigate the process effectively and ensure that the proposed plan aligns with your business’s overall financial strategy.

Invoice on computer screen

What is Invoice Financing?

Posted on | by Jade Donno

In the realm of business finance, one solution that has been gaining traction, especially among small and medium-sized enterprises (SMEs), is invoice financing. This financial tool can be a lifeline for businesses waiting on payments for services rendered or products delivered. Here’s a deep dive into what it is, how it works, and why it could be a critical strategy for your business.

Invoice financing is a way for businesses to borrow money against the amounts due from customers. This innovative financing method allows businesses to improve cash flow, pay employees and suppliers, and reinvest in operations and growth earlier than they could if they had to wait until their customers paid their invoices.

How Does it Work?

Essentially, a business uses its outstanding invoices as collateral to receive a percentage of the invoice value upfront from a lender. The process typically involves the following steps:

  1. Invoice Issuance: Your business issues an invoice to a customer for goods or services.
  2. Financing Company Involvement: You sell this invoice to a financing company (either a portion or the full amount).
  3. Immediate Cash Flow: The financing company advances you most of the invoice amount (usually 70-90%).
  4. Customer Payment: Your customer pays the invoice directly to the financing company.
  5. Receiving the Balance: Once the customer pays, you receive the remaining balance, minus fees and interest.

Types of Invoice Financing

There are two main types:

  1. Invoice Factoring: The finance company manages your sales ledger and collects money owed by your customers themselves.
  2. Invoice Discounting: You maintain control over your sales ledger and chase customer payments yourself.

Why Consider this type of funding?

Immediate Cash Flow Benefits

The primary advantage of invoice financing is the immediate boost to cash flow. Businesses often have to wait 30, 60, or even 90 days for payment after delivering a product or service. This accelerates this process, providing funds when they’re needed most.

Growth and Stability

This financing method can be particularly beneficial for businesses experiencing rapid growth or those needing to stabilise cash flow. By unlocking capital tied up in invoices, businesses can invest in new projects, hire staff, or simply cover day-to-day expenses.

Easier Than Traditional Loans

This type of funding does not require the collateral typically needed for traditional loans. Since the invoices themselves act as collateral, businesses with solid sales but little credit history may find it easier to secure funding through this route.

Considerations and Conclusion

While invoice financing offers numerous benefits, it’s crucial to consider the costs, as fees and interest can vary. Additionally, depending on the type of invoice financing, your relationship with customers might be affected.

For businesses struggling with cash flow due to slow-paying customers, invoice financing can be a viable solution. It offers the flexibility to manage finances more effectively, ensuring that your business can continue to operate smoothly and grow.

By understanding the intricacies of invoice financing, businesses can make informed decisions about managing their cash flow and maintaining financial health. As with any financial decision, it’s advisable to consult with a financial advisor or accountant to understand fully how funding can fit into your broader financial strategy.

Business asset - trucks

What is Asset Finance?

Posted on | by Jade Donno

What is Asset Finance?

In today’s fast-paced business world, staying ahead often means having the right tools and equipment at your disposal. However, acquiring these assets can be a significant financial burden, especially for small and medium-sized enterprises (SMEs) in the UK. This is where asset finance comes into play, offering a viable solution for businesses looking to expand or update their equipment without the upfront costs.

It’s a type of financial arrangement that allows businesses to obtain equipment, vehicles, machinery, or any other necessary assets without having to pay the full amount upfront. Instead, companies can use these assets while paying for them over time. This financing approach comes in various forms, including hire purchase, finance leases, and operating leases.

  1. Hire Purchase: This allows a business to buy the asset over time. You pay instalments and eventually own the asset outright.
  2. Finance Leases: Here, you rent the asset for a significant part of its useful life but don’t ever own it.
  3. Operating Leases: Similar to finance leases, but for a shorter period, often less than the asset’s life.

Why Opt for Asset Finance?

The benefits are manifold:

  1. Cash Flow Management: It helps in managing cash flow effectively by eliminating the need for a large initial outlay of cash.
  2. Access to the Latest Equipment: It allows businesses to acquire the latest machinery or technology without prohibitive costs.
  3. Tax Efficiency: Payments can often be offset against taxable profit (specifics can vary).
  4. Flexibility: Tailored payment terms to match the business’s cash flow.

The Role of Accountants

Accountants play a pivotal role in this process. They not only help businesses manage their finances but can also be instrumental in securing asset finance. This is particularly true when accountants have partnerships with finance platforms like 1 Accounts and Swoop.

Conclusion

Asset finance represents a strategic approach for UK businesses to maintain competitive edge and operational efficiency. The involvement of experienced accountants, especially through collaborations like that of 1 Accounts and Swoop, can significantly ease the process of securing such finance. It empowers businesses to make the most out of their assets while maintaining healthy cash flow and financial stability.

Whether you’re looking to upgrade your machinery, acquire new vehicles, or simply improve your technological capabilities, considering asset finance could be a wise financial decision. Remember, consulting with your accountant can provide a clearer path and help tailor the finance option that best suits your business needs.

Should I Get a Business Loan?

Posted on | by Jade Donno

Should I Get a Business Loan?

Running a successful business often requires a steady flow of capital to cover various expenses and seize growth opportunities. However, not every business has the financial resources readily available to meet these needs. This is where business loans come into play. In the UK, there are several reasons why a business might consider getting a loan, and there are different types of loans available to cater to specific needs. In this blog, we’ll explore the various situations in which businesses seek loans and delve into the different types of business loans, including asset and invoice financing.

Reasons to get a business loan

Startup Capital

Many entrepreneurs require initial funding to launch their business ventures. A business loan can provide the necessary capital to cover expenses such as equipment purchase, marketing, and operational costs during the early stages.

Expansion and Growth

As businesses grow, they often need additional funds to expand operations, open new locations, or introduce new products or services. A business loan can fuel these growth initiatives.

Working Capital

Maintaining a healthy cash flow is essential for any business. Sometimes, unforeseen expenses or fluctuations in revenue can lead to cash flow gaps. A short-term business loan can bridge these gaps and keep operations running smoothly.

Equipment Purchase

If your business relies on specialised machinery or equipment, financing options like asset financing can help you acquire these assets without straining your cash reserves.

Stock Management

Businesses with seasonal fluctuations may need funds to stock up on their stock during peak seasons. A business loan can ensure you have enough stock to meet customer demand.

Debt Consolidation

If your business has multiple outstanding loans or high-interest debts, consolidating them into a single, lower-interest business loan can simplify repayment and save on interest costs.

Invoice Financing

Businesses with outstanding invoices can use invoice financing to access a portion of the money tied up in unpaid invoices. This can improve cash flow and help meet immediate financial needs.

Types of Business Loans

Term Loans

These are traditional loans with fixed terms and interest rates. Term loans are suitable for various purposes, including expansion, purchasing equipment, or funding working capital. In the UK, you can find term loans from banks, online lenders, and financial institutions. Your accountant may also be able to help you find the best loan for your business.

Business Lines of Credit

A business line of credit in the UK functions similarly to a credit card. It provides businesses with a predetermined credit limit, and you can draw funds as needed. Interest is only charged on the amount borrowed. It’s a flexible option for managing short-term expenses and working capital fluctuations.

Asset Financing

Asset-based loans use your business assets, such as machinery, vehicles, or real estate, as collateral to secure the loan. In the UK, asset financing is common for acquiring or refinancing assets. It allows businesses to access capital while retaining ownership of essential assets.

Invoice Financing

Also known as invoice factoring or discounting, this type of financing is prevalent in the UK. Businesses can access a portion of the money tied up in unpaid invoices. Invoice financing improves cash flow, which is crucial for meeting immediate financial needs while awaiting client payments.

Start-Up Loans

For new businesses in the UK, the Start-Up Loans program offers government-backed loans with low interest rates. It’s designed to help entrepreneurs kickstart their ventures.

Overall

In the UK, there are several types of business loans to meet a wide range of financial needs. Whether you’re a startup in need of initial capital, an established business looking to expand, or a company facing cash flow challenges, understanding the available loan options can help you make an informed decision. It’s advisable to consult with financial experts or loan advisors who are familiar with the UK market to identify the most suitable financing solution for your specific business circumstances.

What Lenders Look for When You’re Applying for a Business Loan

Posted on | by Jade Donno

What Lenders Look for When You’re Applying for a Business Loan

Securing a business loan is a critical step in the growth and success of your company. Whether you’re launching a new venture, expanding an existing business, or addressing financial challenges, understanding what lenders look for can significantly improve your chances of approval. One crucial aspect lenders consider is your financial forecast, and your accountant can play a pivotal role in helping you with this vital element of your loan application.

What Lenders Consider

Creditworthiness: Your Personal and Business Credit Score

Lenders place great importance on your creditworthiness. They examine both your personal and business credit scores to evaluate your risk level. A strong credit history demonstrates your ability to manage debt responsibly. If your credit needs improvement, working with your accountant to address this issue is an essential step.

Business Plan and Purpose

Lenders want to understand how you plan to use the business loan and whether it aligns with your business’s objectives. Your accountant can help you develop a well-thought-out business plan that demonstrates a clear vision for your company’s future. This plan should include details on how the loan will be used, target market analysis, competition insights, revenue projections, and a repayment strategy.

Financial Statements

Your accountant can provide you with accurate financial statements, including balance sheets, income statements, and cash flow forecasts. These documents offer lenders insight into your business’s financial health, profitability, liquidity, and ability to repay the loan. Maintaining precise and up-to-date financial records is crucial.

Forecasting Your Financial Performance

Accurate financial forecasting is where your accountant’s expertise truly shines. Lenders want to see that you have a realistic plan for generating revenue and repaying the loan. Your accountant can assist in estimating future income, expenses, and cash flow, ensuring that your financial projections are robust and credible.

How Your Accountant Can Help

  1. Credit Score Improvement: Your accountant can guide you on actions to improve both personal and business credit scores, making you a more attractive candidate for lenders.
  2. Business Plan Development: Collaborating with your accountant on creating a comprehensive business plan that showcases your business’s potential and loan repayment ability.
  3. Financial Statement Management: Ensuring your financial statements are accurate and up-to-date to present a clear picture of your business’s financial health to potential lenders.

    Conclusion

    Securing a business loan involves several key considerations, including creditworthiness, a well-crafted business plan, precise financial statements, and accurate financial forecasting. Your accountant is a valuable resource in addressing these aspects and can play a crucial role in improving your chances of loan approval.

    At 1Accounts Online, we understand the importance of your accountant’s expertise in your financial journey. With the added advantage of our partnership with Swoop, you can access an even wider range of financial solutions. Contact us today to take the next step toward achieving your business goals, with your accountant by your side and Swoop’s support in securing business loans, grants, and credit score improvement.

    Elevating Business: 1 Accounts Partners with Swoop

    Posted on | by Jade Donno

    In the ever-evolving landscape of business and finance, staying ahead means leveraging every available resource to fuel growth and efficiency. That’s why 1 Accounts Online is thrilled to announce our partnership with Swoop, a move set to revolutionise the way our clients manage their finances, access funding, and combat the energy crisis.

    Why Partner with Swoop?

    Swoop is a renowned platform that simplifies and speeds up access to loans, equity, and grants for businesses. Their expertise in financial solutions, combined with our accounting prowess, creates a synergy that promises to bring unparalleled value to our clients.

    What This Partnership Means for Our Clients.

    1. Enhanced Funding Opportunities:

    Gain access to a broad range of funding options tailored to fit your business needs. Whether it’s a loan, equity finance, or grant, our combined efforts make the search and application process easier than ever.

    2. Energy cost savings:

    In today’s world, being energy efficient is not just good for the planet, it’s essential for business success. Our partnership with Swoop opens the door to innovative solutions that reduce energy costs, contributing to a healthier bottom line and a greener planet.

    3. Empowered Financial Decisions:

    Knowledge is power, especially when it comes to financial planning. With our collaborative tools and expertise, you’ll have a clearer understanding of your business’s financial health, empowering you to make informed decisions that spur growth.

    Looking Ahead

    The business world is dynamic, and so are the needs of our clients. This partnership is just the beginning. We are committed to continuously exploring innovative ways to provide value and support to our clients at every stage of their business journey.

    Are you ready to explore how this partnership can benefit your business? Reach out to us today to learn more and take the first step towards a more prosperous and efficient future.

    jumper, hot chocolate and book for autumn

    Simplifying the Autumn Statement

    Posted on | by Jade Donno

    Hello, business owners! Let’s talk about what the UK Autumn Statement means for you in plain English, with all the important bits you need to know:

    Our director Paul breaks down the Autumn budget with a quick synopsis

    Cash Cushion for Growth

    The government has a safety net of funds aimed at supporting businesses making sure they can grow. They’ve introduced 110 measures to help businesses with things like productivity and taxes​​. This is collated in a 120 document you can click here to read.

    Drinks on Hold

    If you’re in the business of selling drinks, there’s good news – no tax hike on alcohol until August 2024. Cigarette sellers, however, will see a 10% tax increase​​ on hand-rolling tobacco.

    Friendly Rates for Small Businesses

    If your business is on the smaller side, you’ll be glad to hear that your business rates won’t go up this year. And if you’re in retail, hospitality, or leisure, you’ll continue to enjoy a significant reduction in business rates​​.

    Full Speed on Spending

    When you buy equipment for your business, you can now get a tax break for the full price from now on. This should make investing in your business a bit more attractive​​.

    Simpler Tax Breaks for Innovation

    If your business invests in research and development, things are getting simpler. The government is merging two tax relief schemes into one, making it easier to understand and claim your benefits​​.

    Cheer for Creative Types

    For the creatives making films, TV shows, or games, there’s a new tax credit system starting in 2024 that may put some extra cashback in your pocket​​. We are awaiting the details on this one!

    National Insurance Cuts

    Big news for both employees and the self-employed: National Insurance is getting cheaper. Employees will see a 2% cut from their National Insurance rates, and for the self-employed, Class 4 NI goes down by 1% to 8%. Plus, a certain type of National Insurance payment, known as Class 2, will be abolished, making tax a bit simpler for the self-employed​​.

    More Money in Your Pocket

    With all these changes, if you’re earning an average salary, your taxes will be lower in the UK than in many other major economies. This means more take-home pay for millions of workers​​.

    Minimum Wage Jump

    Last but certainly not least, if you’re paying your staff minimum wage, note that it’s going up to £11.44 from April 2024. This is a significant raise, which means those earning the minimum will take home more money​​ but it also could be a huge change for your business. Making it more important than ever to plan!

    Listen to Paul talking about the impact on small businesses by watching this video.

    Remember, all these changes are about making sure that work pays off more and that your business can thrive. It’s always a good idea to chat with an accountant to see exactly how these changes affect your specific business. Stay informed and keep growing!

    Please check out our social media for more videos breaking down the budget!

    Celebrating a Decade of 1 Accounts

    Posted on | by Jade Donno

    From Humble Beginnings to Industry Pioneers

    As we stand on the brink of a significant milestone, it’s time to turn the pages back to where it all began—a journey from a modest room in our house to a prominent office in Haverhill. Ten years ago, Paul and Jenni Donno set out with a vision to bring cloud accounting to the forefront of the business world. With a handful of clients and a passion for change, 1 Accounts was born.

    Early Recognition and the Pursuit of Innovation (2013-2015)

    Our inaugural years set the tone for what was to become a saga of relentless pursuit of service excellence. Early accolades at the British Accountancy Awards and being named Sage’s Online Provider of the Year were not just trophies on our shelves—they were the fuel that propelled us forward.

    Building Our Culture and Community (2016-2019)

    As our team expanded, so did our need for space, leading us to our high-street office. We weren’t just recognised for our professional expertise—we also embedded fun into our culture with initiatives like Sausage Roll Fridays and Dress Down Fridays. Our team-building events, including a memorable day at Wild Tracks and a triumphant outing at Top Golf, reinforced the bond that is the backbone of our firm. Our team grew with the addition of cherished members like Adrian, Kerry and James, whose growth from apprentice to a fully qualified accountant mirrored our own evolution.

    Adapting to Change, Supporting Through Challenges (2020-2021)

    The unforeseen pandemic tested the mettle of businesses everywhere. At 1 Accounts, we transitioned to remote work seamlessly, thanks to our cloud-based systems. Our team worked tirelessly to navigate new schemes, offering additional support to our clients when they needed it most. The introduction of office dogs Honey and Jango, and the shift to a hybrid work model, were testaments to our adaptability and focus on well-being.

    A New Chapter of Leadership and Legacy (2022-2023)

    These past two years have been about leadership and legacy. We’ve been recognised once more for our dedication to the industry, with Paul winning Business Leader of the Year and Katie being shortlisted for Employee of the Year. The addition of Josh to the family business, the integration of new services, and our engaging networking events are the highlights that showcase our commitment to growth and community.

    Our Gratitude and Vision for the Future

    As we celebrate this 10-year anniversary, we are filled with gratitude for the trust and support of our clients and the dedication of our team. Our story is not just about the numbers; it’s about the people, the relationships, and the shared successes. We are proud of our past and excited for the future.

    Here’s to the next decade of innovation, service, and community at 1 Accounts. Thank you for being a pivotal part of our journey.

    leaves for autumn

    Understanding the Autumn Statement and Its Impact on Your Business

    Posted on | by Jade Donno

    The Autumn Statement is more than just a financial forecast; it’s a roadmap that can influence your business decisions for the upcoming year. At 1 Accounts Online Ltd, we understand its significance and are here to simplify what it means for you.

    What is the Autumn Statement?

    This annual announcement by the Chancellor of the Exchequer outlines the government’s economic plans and budget priorities, giving us insight into the fiscal direction of the country.

    The Importance of Staying Informed:

    • Business Forecasting: Economic indicators from the Statement guide us in helping you plan your next business move.
    • Policy Updates: It’s essential to know about changes in taxation or spending that may affect your business’s bottom line.
    • Strategic Advantage: With our expert analysis, you can turn the information from the Statement into a competitive edge.

    Impact on Your Business:

    • Corporate Tax Rates: Any changes here could be critical to your financial strategy, and we’re on hand to navigate through them​​.
    • Regulatory Adjustments: We’ll decode complex legislative updates, such as IR35 changes, so you can focus on running your business​​.
    • Fiscal Signals: Tax cuts or adjustments in government spending signal economic trends that could impact your growth plans​​.

    The Autumn Statement is a vital indicator for strategic business planning, and we at 1 Accounts Online Ltd are dedicated to providing you with clear, actionable advice. As we approach the release of this year’s Statement, let’s work together to align your business with the upcoming economic landscape.