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How to prepare your cash flow for winter energy bills
As the nights start to draw in and the weather turns its habitual shade of grey, a general sense of doom and gloom has been prevailing.
While the Prime Minister hails that 'Things will get worse before they get better', those with an entrepreneurial mindset and a drive to thrive will know that there's no such thing as bad weather - only the wrong proverbial outfit. In short, having the right systems in place to manage changing circumstances is the key to having an agile business. When it comes to managing the costs of running a business, a sensible approach to cash flow is king.
In our last article we discussed how to stop your corporation tax bill or VAT giving you cash flow worries particularly with the widely accepted knowledge that corporation tax will go up with the October budget. However, another area of cost that will impact businesses more in the winter months is the energy bills for office spaces.
Alongside the cooler weather, which sees the cost of heating rise anyway, September saw the announcement that energy bills are once again on the rise. The House of Commons wrote:
"Unit prices for gas will increase by 14% in October 2024 and electricity by 10%. Standing charges will increase very slightly. Despite the general fall in prices since early 2023, typical bills under the September to December 2024 price cap will still be just over 40% 30% higher than in winter 2021/22."
While rising costs are never welcome, optimising your cash flow so that you can balance the books, get on with the running of your business and create optimum outcomes in both the short- and long-term separate the wheat from the chaff. One way to do that is with short-term loans to address both immediate and long-term needs whilst keeping cash in the bank to allow you to get on with the daily grind.
Short-term small business loans for working capital
Short-term loans like our Cash Flow Solution Loans, which are available for terms between three and 12 months, are ideal for managing cash flow and daily operations.
Those energy bills need to be paid alongside everything else, and they are likely coming on top of a busy season in the lead up towards Christmas. Some businesses may be looking to buy more stock before the festive rush and Black Friday sales, spend on marketing and advertising campaigns, or bring in more temporary staff for the season.
For all these things, short-term loans designed for working capital and cash flow are ideal. Ours are available from £5,000 with repayments made at 14-day intervals, so you can fully utilise the benefits of the borrowing, and there are no early repayment penalties.
Medium-term small business loans for long-term financial benefit
With energy prices showing no signs of abating in the foreseeable future, you might also want to think more long-term. For example, if January is traditionally a quieter time of year for your business you might also consider planning for a renovation or refurbishment project to bring those future energy bills down.
You might look to improve the insulation, energy efficiency or even the eco-credentials of your office through renewable energy options like solar panels and heat pumps as part of both environmentally and fiscally astute business planning.
In that case, a medium-term Business Growth Funding Loan could be the right solution. For terms between 24 and 60 months (about five years), they are available in amounts up to £100,000 repaid monthly and helping to plan ahead for next winter.
Importantly, for both options, it's quick to apply, and get the fund into your account so you can start making your cash work for you straight away.
Check your eligibility for a Rivers loan and see the possible repayment amounts using our business loan calculator.
