But Liberis offers business cash advances of between 2,500 and 300,000 with a fixed overall fee, regardless of when you can afford to pay it back.
The money is repaid via a fixed percentage direct from your credit and debit card sales, which means that repayment mirrors future revenue.
So if you don’t have a very strong revenue pipeline, sales are diminished because of seasonality, competition, depression in the marketplace, then your payments are against that because it’s a percentage and not a cash figure,” says Liberis CEO Paul Mildenstein, formely COO of Claire’s Accessories and MD of Budgens/Londis.
“We never know when we are going to get our money back, because your business could drop off the face of the earth and it could take two years. Your business however might benefit from the investment of our funds and therefore take off rapidly and pay us back faster.
The total amount to be repaid and the percentage of sales to be contributed is determined on an individual basis obviously you have to pay a premium for the flexibility. Case studies provided by Liberis include:
A pub chain is advanced 59,000 with a factor rate of 1.27, and repays a total of 74,930.
A wheel supplier is advanced 100,000 with a factor rate of 1.15, and repays a total of 115,000.
So far the firm has advanced 70m to UK businesses but Mildenstein says business cash advances could really take off he estimates the market to be worth 2bn in the US at present.