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What is capital advisory and how can it make accountancy firms more competitive?

It’s simple: accountancy practices with a capital advisory function will do more business, with higher-value clients.

Paul Surtees Aug 11, 2021

Accountancy practices with a capital advisory function will do more business, with higher-value clients – and those clients will be more profitable as a result.

'Business advisory’ is a vague concept that doesn’t cut through with SMEs. In our experience, SME owner-operators tend to assume that when accountants talk about business advice they mean something relating strictly to tax.

Talk to accountants, meanwhile, and it’s clear what they generally mean is big picture stuff – long-term planning, growth strategy, even marketing and lead generation.

As a result of this misunderstanding, evidence shows those running SMEs and startups don’t believe accountants are equipped to deliver advice.


Do your clients come to you?

A recent piece of research found that around 30% of SME owners wouldn’t go to their accountant for business advice because they felt they lacked practical experience in business.

More than half said they wouldn’t be willing to pay more than £1,000 per year for business advice from an accountant, which is worrying when you consider that the potential increase in profitability would, in most cases, easily swallow any fee.

One obvious solution to this problem is for accountants to get more specific and practical when talking around this topic.

Which particular problems does their advice solve? What will it help their client achieve?

And that brings us to capital advisory.


What is Capital Advisory?

Capital advisory is about connecting clients with sources of funding and finance they might not have considered, or would not have otherwise have had the ability to access.

In other words, it’s about saying: “Your business needs capital; we can advise you on what form of funding will work best for you, identify the right provider and put you in touch.”

For businesses struggling to fund growth, manage cashflow or acquire equipment that will unlock earning potential, that’s a clear and compelling offer.

People want clear, authoritative advice or, at least, to have the range of options narrowed so they’re not paralysed by choice.


Client problem The Solution 

They want to invest in new equipment but don't have the funds to do so.

Asset finance – a cost effective way of spreading the cost of equipment over its economic life through hire purchase, leasing and refinancing.

Cashflow is a problem because of unpaid invoices. Invoice finance – get paid up to 95% of the outstanding amount upfront, usually within 24 hours.
They can’t take on lucrative work because they can’t cover the cost of supplies required to fulfil orders. Trade finance – AKA purchase order finance or supplier finance; lenders will pay your suppliers upfront based on confirmed purchase orders.
They need fast access to capital. Merchant cash advance – an established alternative to bank loans using credit card transactions to secure funding, paying back a small percentage when customers pay with a credit or debit card.
Struggling to cover everyday business costs such as salary. Working capital loans – easy and hassle-free, with funding received within a few business days.
Need funding to cover the purchase of commercial property. Business property finance – bespoke financing options to buy commercial property until it is sold, rented or refinanced through more traditional methods.


Your firm’s capital advisory function

Setting up a capital advisory offer for your clients might sound like a big job – but that’s what Capitalise is all about.

Our technology gives you access to more than a hundred funding sources from banks to independents, allowing you to match your clients’ needs with what’s on the market.

Find out how your practice could start delivering advice with Capitalise by booking a free demo and sign up to our newsletter for insight and tips on funding and finance.



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