November 8, 2019

Borrowing money for your Business? – Here are 5 things YOU should consider.

When Busy Business owners ask their lender for additional funds, they aren’t always aware of the key things they should be considering before they say yes to the deal being offered.

Here are our top 5 tips to make sure that you get the most suitable type of finance when you need to borrow money for your Business.

1. Why – Are you borrowing money to purchase a new asset, fund your cash flow due to growth or expansion, or cover a gap caused by a problem in your business?

Each of these reasons will require a different type of finance, and it is important to understand the why when considering any request for funding for your business.

2. Term – How long do you need the money for? If you are buying a property for your Business for example – you would expect to spread the cost of this over a number of years in order to make the repayments affordable.

You wouldn’t go and buy a new home on your Credit Card – so purchasing property will always be considered as a longer term finance option unless you are Bridging a gap ahead of a repayment from another source.

You may be buying a vehicle or piece of plant an equipment using Asset Finance. Your term should be spread over the useful lifetime of the asset.

Security for the lender is a charge over the Asset you are purchasing with repayment Terms often spread over 12 – 60 months depending upon the age of the asset and it’s expected lifespan.

With Hire Purchase Finance this security will be released by the lender upon receipt of the final payment where ownership will fully revert to you.

3. Affordability – You have established why you need to borrow the money, which will narrow down the type and repayment terms of funding you need.

You now need to consider whether you have enough cash within your Business to comfortably make the necessary repayments.

When Calculating Affordability – Don’t forget to take into account the requirements of the business to fund its existing borrowing commitments, pay its tax, and cover any Directors/Owners salaries.

4. Interest Rates and Arrangement Fees – These can make all the difference to your Business, and it is important to make sure that you are achieving the best rate and fee structure possible when you arrange your new borrowing.

Many Businesses will operate a significant overdraft facility which they will pay a fee to renew annually.

We regularly find that if there has been enough headroom in an overdraft facility to absorb the cost of buying an asset for example or carrying out improvement works to premises the overdraft has been used to fund this work. This can mean that the customer can end up paying every year a fee on the amount of money they are borrowing, rather than a one-off fee on a term loan which is repaid over time.

Paying an annual fee will work out far more expensive in the long run, so make sure you have taken fees into the account when considering the overall cost of your borrowing facility.

5. Not all Businesses are the Same – and Not all Lenders will want to do business with you!

It was not so very long ago that if you wanted to borrow money for your Business you made an appointment with your local Bank Manager and hopefully got the, yes you wanted!

Since the last financial crisis hit in 2008, Business Finance has undergone a dramatic transformation. There are now many new entrants to the market, and many of these lenders have bespoke products to suit particular types of clients or borrowing needs.

Your Business may be an excellent one, but if you operate in a Sector that your lender is not comfortable in, then you won’t get the positive response you are hoping for.

Our advice is always to seek professional advice ahead of applying for finance for your Business – A well-structured finance model will help your business to thrive in the future.

Our Team are always happy to take a call to discuss your plans and regularly work with other Finance Professionals to help Business owners arrange the finance they need.

There are lots of lenders in the market who advertise aggressively – these lenders are often not the ones offering the most competitive rates. It always pays to know who you should be talking to.

For a no obligation discussion about how your Business Finance works, – why not arrange a free initial consultation today. We are always happy to take calls from customers old and new as well as their professional advisors. We look forward to hearing from you.

Call – 01229 588077

Email –

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October 23, 2019
LENDERS battling for the custom of Brexit-wary SMEs are offering some amazingly competitive deals, a leading financial broker has said.
Karina Gallagher says there has been a huge shift in the landscape in recent weeks, with lenders aggressively pricing funding to win business.
It comes against the backdrop of many businesses holding back on accessing funding to invest in assets as they await the outcome of Brexit.
But now may be the best time to act, says Karina, especially for companies operating in sectors where vehicles are a core part of the operation.
“For strong businesses, I am seeing some extremely attractive rates as the lenders compete for these deals” said Karina, the managing director of Cumbria-based Hornby Commercial.
“Lending at the moment, particularly in the transport sector is incredibly cheap, so for a business looking to buy, say a coach, a HGV or something similar, now is a very good time to take action.”
SME borrowing reached a two year high in June, increasing by £375m, a growth rate of 0.8 per cent, figures from the Bank of England revealed. Borrowing by firms increased overall by £2.5bn in June and during the first half of 2019, borrowing was stronger than the same period in 2018.
But Karina, who has more than 30 years of experience in the banking sector, says there has been a marked slowdown in SME lending in the last quarter, attributing much of it to a lack of certainty over the UK’s exit from the European Union.
And she says a lack of confidence is leading a majority of businesses to postpone the implementation of growth or investment plans.
But that, she believes, presents an opportunity for the bold to capitalise by investing while their peers and competitors do not.
“It is understandable that many businesses have Brexit-induced jitters,” she said. “But what that means is there is a real chance here for those companies who have the courage of their convictions to really thrive.
“Putting investment off until such a time that everyone decides the climate is right only means you follow the pack.
“Any decision to invest must, of course, be backed by a sound financial plan and projections. And if it is not right for the business for any reason, I see a part of my job as communicating that.
“But with rates this low, if the time is right, it is right regardless of the hand played by the Prime Minister in Europe.”
Business owners are also being encouraged to consider that the Government’s Annual Investment Allowance (AIA) is currently under a temporary uplift to £1M until 31 Dec 2020.
This means that there can be significant additional tax benefits of investment during this period that will not be available when the AIA limit reverts to its usual £200k on 1st January 2021.
“We always encourage discussing any investment plans with your accountant to make sure you have considered all the benefits and risks ahead of any purchase,” said Karina.
Hornby Commercial is an independent financial brokerage with access to a wide range of lenders and funds.
If you would like to speak to Karina about business lending, call 01229 588077 or email

September 25, 2019

There is plenty in the news at the moment around the negative effects on the economy due to the uncertainty caused by Brexit and the wider world wide trade wars going on between China and the US.

Uncertainty can cause Businesses to halt or slow down their plans for investment, in turn reducing their own abilities to capture additional profits at the same time.

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Here are our TOP 5 tips that you can build into your Business to make sure you can weather any potential financial storms that lie ahead.

1.      Plan your cash flow

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Do you know how much working capital your Business needs to operate on a day to day basis, and can you withstand say 20% of your customers not paying you on time?

Making sure that your Business has access to sufficient cash to meet its overheads will give you the confidence to take on orders and maximise profits knowing you will still be able to pay your bills on time.

You may be one of the fortunate few that has a positive cash flow and plenty of money sat in the Bank with which to fund your business, but it still pays to look ahead.

For Businesses that have limited cash in their Bank Accounts it is even more critical that they plan their finances well in advance. Only then can you be confident that you will have the funds in place to deliver your pipeline of work on time and keep your customers happy.

It is always advisable to work with your professional financial advisers to understand your cash flow needs, and apply for any additional credit that may be required in good time.

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2.       Minimise any Funding Gap

Can you balance your supplier payments against your planned customer receipts?

 If you can arrange with your customers and suppliers a payment structure that allows you to receive payment for goods sold ahead of the date you need to pay your suppliers for them, then this will help your Businesses cash flow to remain positive.

Many Businesses seek to take a deposit from their customers in stages, for example 25% on order. This may allow for initial labour costs towards the cost of producing any goods to be sold.

A further stage payment to cover the cost of materials required for the manufacturing process (depending upon supplier payment dates) may be needed ahead of delivery, with a balancing payment (usually representing the profit part of the sale) due on delivery or completion of the service provided.

3.       Keep on top of debt collection. 

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Being paid the money you are owed for work done promptly can make a huge positive impact on your cash flow.

Do you invoice your work as soon as you can?

Delays in sending invoices for work already done can create an additional and unnecessary ‘funding gap’ so keep your invoicing up to date.

Have a robust collections system in place. 

Among the top tips for speedy collection of outstanding debt is to be on first name terms with the person responsible for paying your bill.

A friendly call ahead of any due payment date will ensure that the customer has the opportunity to confirm they are in receipt of your invoice, and also that they don’t have any queries with the bill itself. It is an ideal time to confirm with them in a polite manner that payment will be made on the due date.

Monitor for receipt of payments when they are due. – If payment isn’t received on the due date, put a call in straight away to the customer to understand why payment hasn’t been made, and get a confirmation of when the funds will be received.

Don’t allow yourself to become your customers unpaid Bankers. If you don’t ask, you often don’t get as others will be shouting louder!

If you find that your customer is experiencing issues with paying their bill, you can make an informed choice of how to work with them to put an acceptable payment plan in place. You will also have the opportunity to look at the effect that this late payment will have on your own cash flow.

It can be useful to engage the services of a third party to assist you with the collection of your debt, and there are some excellent companies around who can do this for you without damaging the relationship that you have with your customer.

If you’d like an introduction to experts who can help, talk to us today if you would like an introduction to The Credit Protection Association.

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4.       Timing is everything

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Managing your production facilities to ensure as smooth a flow of work as possible will help you to keep your invoicing regular, and build a pipeline of payments from which you can plan your expenditure.

Any time delays between incurring cost and your ability to issue and collect your invoice will create an additional requirement for cash flow to pay your overheads and any staff.

Make sure that there is excellent communication between your Manufacturing floor and your finance team (if you have one) so that a real time understanding of cash flow is understood across the business.

5.      The right type of finance?

There are a multitude of different types of finance available. 

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Everything from funding working capital expenditure to fixed assets for your business will have a specific type of finance product available– things like buying equipment, machines or vehicles will be done through Asset Finance with repayments structured to the working life of the asset.

Property purchases will be secured by a legal charge in favour of a Commercial loan or Commercial Mortgage which will be repaid over a longer period of time up to 25 years.

Working capital requirements, paying for stock, expenses or staff ahead of your business being able to collect debts may be funded by a combination of Bank Loan, Overdraft or Invoice and Trade finance products.

Having the correct type of finance for your business can make sure that you have sufficient cash flow in place. For example, if you fund your working capital by way of a Bank overdraft, you may be limited by the level of security that the Bank has in place.

A Bank may lend up to 70% against bricks and mortar security, so for a £100K property charged a maximum facility may be capped at £70K.


Say you have invoices outstanding from your customers for £300K at any one time and need to pay your suppliers for goods received. Lets explore how different types of funding can limit or assist your cash flow.

Overdraft vs Invoice Finance

Using an Overdraft facility secured by a charge over a £100K property will release £70K (up to 70% LTV) unless the Bank will agree to an element of unsecured debt.

By using an Invoice finance facility which may release up to 90% of your debtors

£300K x 90% is £270K, some £200K more working capital available than with a Bank overdraft.

What could you do with that £200K?

If you would like to ensure that your Business has access to the funding it needs, why not talk to us today.

Tel 01229 588077





August 13, 2019

BUSINESSES across Cumbria should not have to curtail growth or expansion this year because of continued economic uncertainty, one of the region’s leading business voices has said.

Some firms in the county may be putting expansion and equipment purchases on hold amid concerns of a future downturn post-Brexit.

But Karina Gallagher, managing director of Hornby Commercial, in Ulverston, said this meant companies were missing out on opportunities which could actually increase their profitability in the longer term.

The former banker has now released advice for business owners across the region who remain unsure about whether they should press ahead with their plans in the coming months.

“Some businesses are concerned about retaining their cash flow because of the uncertain climate we are in at the moment,” Karina added.

“This is certainly understandable and I’d always recommend budgeting for the cash a company is going to need in the year ahead.

“But keeping hold of cash can often result in the postponement of moves which could strengthen a firm’s overall position by helping to bring in profit later on.

“For these businesses, there are plenty of options. They can use an appropriate form of low-cost finance to keep cash where it’s needed while still being able to go ahead with planned projects.”

The advice from Hornby Commercial was released following the findings of the most recent quarterly survey from the British Chambers of Commerce.

The organisation found cash flow continues to be a concern for businesses in the manufacturing and service sectors, as it warned market uncertainty is stalling economic growth nationwide.

Karina, who secured more than £6 million of finance for businesses throughout the area last year, added: “Many businesses are hesitant at the moment so they are also opting to use finance to spread things like tax payments and larger asset purchases out over a number of months while keeping their cash in the bank.

“There are lots of options available which will make sure firms are on a sure footing for the months ahead without missing out on essential opportunities to grow.”


November 5, 2018

The Government announced during yesterdays budget that they will temporarily increase the Annual Investment Allowance for two years from the current level of £200,000 to £1 Million for qualifying expenditure incurred from 1st January 2019.

This measure is designed to stimulate business investment in the economy by providing an increased incentive for businesses to invest in plant or machinery.

Who is likely to be affected?

Businesses investing more than £200,000 in plant and machinery from January 2019.

But is it the right time to invest in your Business?

Spending money on an asset that isn’t likely to improve your Businesses productivity or profitability purely to make tax savings won’t make much sense unless you can put the Assets to good work over the longer term. You should also be confident that you have a strong enough cash flow within your business to the commit the necessary cash to your purchase either in a lump sum, or over a period of years on an Asset Finance agreement.

The Chancellor has been under pressure from Business Groups for some time to raise the Annual Investment Allowance once more. By announcing a temporary increase to £1M from 1st January 2019 the plan is to provide an incentive to Businesses already investing in Plant or Equipment up to the £200,000 threshold to bring forward their spending plans or indeed to invest in further equipment during the coming year.

Many businesses will need to spread the cost of purchasing new assets.

There are very few Businesses that will have enough cash sat in their Bank Accounts to make the most of this raised Annual Investment Allowance. Many Businesses who invest regularly in Plant and Equipment will chose to spread the cost of their purchases over the useful lifespan of the asset they are purchasing.

Whether you are considering purchasing your Asset outright, or spreading the cost of your purchase by means of an Asset Finance Hire Purchase Agreement, there is always some useful information to be had on the different types of finance available within the Business Finance Guide published by the British Business Bank.

Anyone considering investing in Business Assets should always check ahead of any purchase with their Accountant and professional advisers to ensure they are clear which assets are covered by this scheme, and which types of finance are eligible. The Government’s own website is always a good place to start for information relating to this scheme and a link is provided below.

>> Temporary Increase in the Annual Investment Allowance <<

We are here if you need us

If you are considering investing in a new piece of plant or equipment and would like some help with your financing, we are always available at the end of a phone to assist and would be delighted to speak with you. We work with a wide panel of lenders, and have access to some of the best rates in the market making sure you receive a competitive deal.

Please see our website via the link below or give us a call on 01229 588077

Email at


October 26, 2018

A collaboration between a high flying bank worker and an accountancy firm twice labelled the best in the UK has been hailed a huge success.

The unique partnership between Karina Gallagher and JF Hornby and Co has seen local businesses benefit from £6m in affordable commercial finance deals in the last 12 months.

Hornby Commercial was launched in 2017, with a desire to bring many of the traditional values once associated with high street banks back to south Cumbria.

Now the fledgeling business has its sights set on expansion as it marks 12 months of lending with the launch of a new website.

Karina, who is managing director of Hornby Commercial, said: “When I left the bank I decided I was going to take a little time out to reflect on the future and what I wanted to do.

“But within 24 hours of thinking that, my mind was made up and I decided I wanted to take all the best bits about being a senior relationship manager with a big bank and set up my own business.

“I met up with Paul to discuss idea, and a quick coffee soon turned into a more detailed discussion.

“It wasn’t long before we had agreed to go ahead and set up the business.”

Hornby Commercial is based on the Daltongate Business Park in Ulverston.

In the last 12 months around 30 businesses have successfully been through the commercial loan procedure, with the benefit of Karina and her 30 years of banking experience on the other end of a telephone.

She said: “I can think of no better way of spending my working day than helping business to access the funding they need.

“If you think a company has a project on and they want to inject some money to be able to deliver it, it becomes about helping to drive a business forward.

“And that can have far-reaching benefits, for the business, for employment and the wider local economy.

“Of course it is very important that we lend in a responsible manner.

“I am here to build a business for the long term and am doing so with one of the most trusted names in the area. This is about doing the right thing for the client.”

It was this experience, along with her character and drive which convinced the MD of Hornby’s, Paul Hornby, to go into business with her.

He said: “Karina is extremely commercially savvy and brings huge experience to Hornby Commercial.

“From the start, she was driven to make it a success. The business really is filling a gap in the market which has been left by the banks.

“Where at one time you could have a conversation with your bank manager about a loan, nowadays unless your business has a turnover running into the millions it is unlikely that your contact with your bank will be with a someone who knows you and your business, and this can feel very impersonal.

“Hornby Commercial is filling that gap and is bringing some of those old-fashioned values back.”