It is a question we are often asked and the short answer is that there may be several different options available to raise money for your business.
You may be eligible to apply to the Small Firms Loan Guarantee Scheme - if your business is under 5 years old and you have no (or very few) assets available to use as security then contact us for a FREE assessment of your eligibility. We can help with applications above £30,000.
Perhaps you would prefer to have Business Angels Investment in your business - this is when a high net worth individual (Private Investor) or a syndicated group puts money into your business in return for shares. Business Angels investment typically ranges between £50,000 and £1m, you will need a strong management team and an investor-ready business plan.
If your company has assets - perhaps plant or machinery - or stock it may be possible to raise money through sale-and-lease- back or asset finance. Asset finance and leasing is likley to require security or personal guarantees.
Factoring or Invoice Discounting could improve your cash flow and provide your company with additional working capital that can be used to grow your business organically. Factoring works by raising funds within 24 hours of raising an invoice rather than having to wait the 30, 60 or 90 days for your creditors to pay.
If your business supplies goods to a purchase order then trade finance may be a solution you want to consider. If you are purchasing the goods from overseas or the orders are seasonal and larger than you usually handle you may find it difficult to find the working capital to pay for the goods upfront. Trade Finance works much like factoring but at an earlier stage in the process.
John Courtney AIMC, MABS, MInstDis, is the managing director of Strategy Consulting Limited (http://www.strategyconsultinglimited.co.uk). Having trained at The Academy of Business Strategy, and is an associate of the Institute of Management Consultancy and a member of the Institute of Directors, he is also a visiting lecturer on the MBA course at Cranfield University School of Management and a Judge in The National Business Awards. John has run training seminars at board level on corporate strategy and made presentations to both large and small groups on funding strategies. He brings a wealth of experience, particularly in corporate strategy, funding, business planning, internet strategy and marketing strategy, including new product development.
