7 March 18

Making corporate cash work harder

Whether your company is small, medium or large, having surplus cash in the business is a healthy situation to be in – it’s certainly better than the opposite scenario where you are constantly running short of working capital and liquidity. But it’s how any extra cash is looked after that has become the major challenge for those in charge of the treasury function, particularly in this current era of low interest rates. You can take the easy way out and place the money in a deposit account and watch as its purchasing power slowly trickles away. Or alternatively, if there are amounts that you can lock up for a time, you could make it work a little bit harder.

If so, there are several factors to take into account, most importantly, are you prepared to accept locking the money up for a period, with an element of risk, in return for being able to earn a proper income from it?

The latest annual report from the British Business Bank (BBB) revealed that, while there has been a widespread fall in loan applications from smaller businesses, many have been amassing more and more cash. At the end of September 2017 SMEs had a total of £170 billion sitting with the banks – often in current accounts, which pay no interest at all. The BBB calculates that around half of SMEs have become ‘Permanent Non-Borrowers’ because of all the uncertainty that they face with rising interest rates, inflation and, of course, the political and economic upheaval created by Brexit.

However all companies have bills arriving that they know they will have to pay and, more importantly, when they will fall due: salaries, rent, Corporation Tax, VAT etc. Those in charge of finance are used to making plans to match the corporate timetable. But with modest forward planning, by using financial instruments like Advancr Bonds, you can actually earn a decent rate of interest on your company’s money.

Advancr Bonds allow investors to commit funds for fixed annual periods from one to five years; the minimum sum accepted is £10,000. Fixed returns are maintained throughout the chosen period and are payable in the form of either monthly interest payments or, for maximum benefit, can be allowed to roll up to the date of maturity.

The rates available on Advancr Bonds are constantly being updated according to market conditions. Both term and rates of return are fixed at the outset and will not change. So the returns are better but is there a difference in risk between Advancr Bonds and bank deposits? The straight answer is yes, but with Triple Point Advancr security is uniquely achieved by each bond being immediately and directly secured against the whole portfolio of underlying leases, loans and asset finance that Triple Point manages – a specialist area in which our investment committee has over a decade of experience and a proven track record of consistently delivering on its targets.

If you are looking for a better return on your money than bank deposits and an investment less volatile than the Stock Market, look no further than Advancr Bonds.