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In this episode, David and Trevor dig into a topic business owners are raising more and more: interest rates and what do they actual equate to in terms or cost to the business.

Banks and other lenders alike, price interest to ensure they can cover their costs and deliver a return to the sources of the capital. But for many business owners, interest rates are still confusing, especially when they are described in different ways. APR, yield, flat rate, fixed, variable, gross, net of fees, the list goes on.

They also tackle the idea of what a “fair” rate of interest actually means. That question only makes sense once you understand the length of the borrowing, the type of finance being used, and whether all the available options have been properly considered. Most importantly, is the finance genuinely the right fit for the business?

Short-term lending products come up a lot in conversations and are often criticised publicly. David and Trevor take a balanced look at these options, explaining when higher interest products might make sense and when they probably do not.

The real focus is the cost to the business. Once the right type of finance is identified, the key questions are whether it is affordable and whether it supports the business’s goals.

This episode breaks interest rates down in plain terms. Hopefully, business owners will now have a better understand what they are being offered and the actual costs that apply...and especially if fees are included, too.

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In this final block of *Finance in Fifteen*, David and Trevor look at why lenders protect themselves by taking a legal charge over a business and/or specific assets.

In the previous episode, they explained why lenders ask for Personal Guarantees. A charge, however, offers a different level of security, and it is important that business owners clearly understand what this means and how it affects them.

As is often the case in business finance, things are rarely simple and not always explained well. Lenders may take fixed charges, floating charges, or sometimes a combination of both. Charges can also rank as 1st or 2nd, and some may be fixed solely against individual assets such as property, land, or other tangible assets.

Before agreeing to any form of charge or guarantee, business owners should understand why it is being taken and have the advantages and disadvantages clearly explained.

In a complex and often unregulated market, no decision about providing security should be made without proper guidance, whether from a legal adviser or a member of The Guild of Business Finance Professionals.

For further information, please do contact the show at podcast@bfpguild.org

Support the show

To access our visual channel please click here https://youtu.be/DyjKdnXoCv4?si=a0aCtHmhuPNQmkjr

Please subscribe and follow us on LinkedIn, Instagram, YouTube and Twitter/X. Just search for 'Business Finance Matters'.

To listen to the Podcast, all episodes can be found on all the major platforms including Spotify, Apple, Amazon and YouTube and https://bfm.buzzsprout.com/

All comments are welcomed and may be discussed on future episodes.

Thanks for listening

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Most markets come with plenty of moving parts, and business finance is no different. In this episode, David and Trevor talk through why lenders ask for Personal Guarantees (PGs), what they mean, and how they affect the people signing them.

Like any type of guarantee, the details depend on several important factors. The aim of this episode is to make the topic clearer so business owners understand their obligations before taking on any debt finance.

Some directors see PGs as a high risk, but that is not always the case. David and Trevor look at the mindset behind why lenders ask for this type of guarantee, the reasons lenders rely on them, and what the actual liabilities could be if a business fails.

Legal advice is always recommended, although working with a recognised business finance professional, such as a member of The Guild of Business Finance Professionals, can give business owners the clarity they need before applying for finance. In many cases, a skilled professional can even negotiate the terms of a guarantee when there is a valid reason to do so.

If there are any business owners that require any further information on PGs and their legalities, please contact the show for further support. In addition, legal support is available in conjunction with legal partners Paris Smith.

Support the show

To access our visual channel please click here https://youtu.be/DyjKdnXoCv4?si=a0aCtHmhuPNQmkjr

Please subscribe and follow us on LinkedIn, Instagram, YouTube and Twitter/X. Just search for 'Business Finance Matters'.

To listen to the Podcast, all episodes can be found on all the major platforms including Spotify, Apple, Amazon and YouTube and https://bfm.buzzsprout.com/

All comments are welcomed and may be discussed on future episodes.

Thanks for listening