What is a Headroom Facility?
With businesses often worrying about the uncertainty of costs in today's economy, it can lead to stress around supplier payments, fuel costs and staff wages - to name a few. Our Headroom Facility is designed to give you that extra breathing space at specific times in your cashflow cycle, ensuring you have enough liquidity to keep reaching your business goals.
Used alongside your Invoice Finance facility with us, a Headroom Facility gives you flexibility to dip into additional funds of up to 10% of your Invoice Finance facility value.
Although your Invoice Finance facility gives you the security and reassurance that you will be able to pay on time, a Headroom Facility alongside this will allow you to negotiate any unexpected or upfront costs with added flexibility.
How does a Headroom Facility work?
Our Headroom Facility is designed to give you that extra breathing space at specific times in your cashflow cycle ensuring you have enough liquidity to keep reaching your business goals.
A Headroom Facility works in one of two ways:
- An additional funding line over and above you standard SBF IF facility that you can dip into as and when it’s needed.
- Typically, a 24-month amortising loan that is repaid in 24 monthly instalments. Alternative structures are available on a cases by case basis.
How much can I have?
Headroom is capped by your sales ledger value. Combined Invoice Finance and Headroom facilities cannot exceed 100% of your sales ledger value. This is calculated using your average historic end of month debtor positions for the previous 12 months.
What are the requirements?
To benefit from our Headroom Facility, you must meet the following requirements:
- You have an IF facility in place or arranged to be in place with SBF
- Ideally, you are a profitable and solvent business that can demonstrate good cashflow management.
- The headroom facility is fully repaid should you decide to leave us.
How much does it cost?
At Skipton Business Finance, we don't offer a ‘one size fits all' product. Instead, we tailor each facility to the individual requirements of each business. This means that the costs of your Headroom Facility will depend on your individual business and will be calculated at the point of enquiry.
Headroom facility costs will be calculated at the point of enquiry and will typically carry a slightly different charging structure to your IF facility, yet still very competitive.
What are the benefits of a Headroom Facility?
A Headroom Facility has a range of benefits that can support your business and allow you to access additional funds if and when they are needed.
- It allows you the flexibility to dip into additional funds at specific times in your cashflow cycle
- It can help smoothen out any unforeseen expenditures throughout the month
- It enables you to act quickly to events such as unexpected upfront costs
- You can focus on developing your business, knowing that you have the safety of the addition headroom on your facility
- The security of a consistent cashflow means you can make better, long-term and strategic decisions
- It gives you and your finance team control over day-to-day operations, knowing the flexibility is there
- It works alongside your Invoice Finance facility with us, so you know you’re in safe hands and will receive an exceptional service