Where to go to fund your SME!

Where to go to fund your SME!: image 1

Growing your small business and ensuring its continued success and profitability can be challenging in an ever-changing highly competitive economy. SMEs are faced with a multitude of business funding solutions and determining which is the most suitable source of business finance for growth can be the difference between success and failure.

There are many sources of business funding available to small businesses in the UK, so to make it easier consider this list of alternative business funding solutions.

1.      The Merchant cash advance or Business cash advance

A cash advance is an exciting alternative to a bank loan, with no fixed monthly payments as repayments are based on your credit and debit card sales. The cash advance is only repaid when your customers pay you. A merchant cash advance puts no pressure on the cashflow of your business and as such is a useful funding alternative to consider when thinking about business funding for growth.

2.      Venture capital funds

Other people’s money is the best way of describing venture capital, it is the pooling of other people’s money into funds, and these funds are managed by companies, who will consider using the money to invest in business opportunities

Venture capital business funding is usually looking for large returns on the money they invest and so will usually finance businesses delivering highly profitable returns.

3.      Equity Finance

If you are happy relinquishing shares in your business to drive growth, or to turn your business from a small business into a larger business equity finance may be an useful source of business funding. The scale of equity finance varies and depends on the business funding requirement. The value your business will often depend on the business financial wellbeing as well as the amounts previously invested into the business.

4.     Bank Loans

A Business bank loan is often used to fund small business.

Bank loans come in two forms

·        Unsecured – No security is required against this loan.

·        Secured – You will need to consider putting up security and, if for any reason the business fails to make repayments or defaults on the loan the implications surrounding this non-payment.

5.     Crowd Funding

As an alternative source of business funding, crowdfunding is a very interesting alternative, as essentially you will be asking a large number of people, each for a small amount of money this is usually undertaken via the internet.

There are 3 types of crowdfunding solutions available to small business looking for funding

·        Donation Crowdfunding – people enjoy what you do or believe in your cause. In this instance, the funder may not require the debt be repaid with cash or with interest but may simply request acknowledgment or gift in return.

·        Debt Crowdfunding – Money is paid back to anyone who invested in the business.

·        Equity Crowdfunding – People would invest for shares

      Business Credit cards

If you own your small business and are looking to finance the day to day expenses, a business credit card could be a funding solution. In some instances, these products offer added benefits like rewards, insurance, and in some cases airport lounge access.  

The route you decide to go when looking for business funding in the UK depends on many factors.

·        How much money do you need to fund your small business

·        Consider the size of your business and the impact of further borrowing

·        Are you looking for an alternative funding solution, perhaps investment, in which case are you happy to relinquish equity?

·        Do you have and are you comfortable offering up security to fund your business.

·        Do you own or rent the premises from which the business operates?


COMPANY NAME:  365 Business Finance

URL: www.365businessfinance.co.uk

EMAIL: matt@365businessfinance.co.uk

PHONE: 02071000365