To make your business work, you’re going to need some capital behind you.
Whether it’s the funds needed to get your business idea off the ground in the first place, or additional finance to help your growth plans, you need cash to help your start-up thrive.
Traditional routes to funding
So, if you’re in need of additional finance, what are they key ways to find that ready cash?
- Cash your savings in – one option is to dip into your personal savings to find that start-up cash, but this is a risky option that could put your home and your own financial future in jeopardy. It’s best to avoid unless you really have no other options.
- Bank loans and overdrafts – Most of the high street banks will offer business loans and overdrafts, but you’ll need a good business plan, a convincing argument for why you need the money and sales and profit forecasts that show you can repay the loan to the terms and timelines agreed with the bank.
- Private investors – another well-trodden path to funding is to look for private investors. An injection of cash from an engaged investor can help you achieve your business goals, but you’ll need to guarantee a healthy return on that investment for any private investors – and they may also want some element of control over your future strategy.
- Venture capital and private equity – if the investment you need is substantial, you may have to look to private investment firms to supply the cash you need. You’re likely to also lose an element of control over the destiny of the business and you’ll need extremely detailed business plan and financial forecasts to convince your potential investors.
- Government incentives and grants – the Government runs a number of enterprise schemes, grants and tax incentives that can help to provide some of the cash you need for your growth plans – but these are unlikely to deliver the full funding you need.
New routes to funding
There are other alternative routes to funding that are worth looking into and adding into your financing melting pot.
- Invoice financing – if you need finance FAST then ‘invoice financing’ can be a route to explore. In essence, you sell the debt on your outstanding invoices to a third-party invoice finance company, they pay you the cash you’re owed and then the finance company collects the debt direct from your customers. It’s a short-term solution, but can help you out of a tight spot. MarketInvoice is a good option if you're looking for an invoice financing solution.
- Crowdfunding – crowdfunding sites like Kickstarter and Seedr are increasingly popular route for start-ups that need cash but can’t raise the funds through traditional means. With crowdfunding, you set a funding target and the general public donate a small amount towards your funding total. And, by funding your project, your investors will usually be the first people to get try your new product or service.
- Crowd-based/ peer-to-peer loans – rather than taking out a loan with a big financial institution, peer-to-peer loans use online sites to match public investors with the individuals or businesses in need of money. If the more traditional routes don’t bear fruit, this can be a way to access finance fast and at potentially lower interest rates.
If you need help working through the different funding routes, give us a call on 01454 300 999 or drop an email to email@example.com
If you need help with access to funding, give us a call on 01454 300 999 or drop an email to firstname.lastname@example.org