Growing your business

Helping you build a better future

Finance Providers

You can choose from any number of different finance providers, it all depends on your circumstances. Each provider works to different rules and listed below are some examples of what is available:

1. Banks

2. Commercial Property Finance

3. Equity/ Seedcorn Capital

4. Grants

5. Asset Purchase Finance

6. Working Capital Providers

7. Crowd Funding

Take a look in the Links Tab to find out more about each of the different catagories.

Banks

Choosing the right bank is a critical decision when starting up a business. You will need an efficient, business-friendly account provider who will provide you with plenty of support and, preferably, generous loans, useful business tools and helpful advice.

Almost as important is keeping an eye on other banks once you have chosen who to go with. Research has shown that most businesses stay with their current account supplier whatever happens, not looking around for better deals even if they are opening new accounts. Therefore, it’s important that entrepreneurs keep abreast of what the banks offer, and switch accordingly if necessary. This is especially important when you need to rais funds.

Commercial Property Finance

Commercial Property Finance  can be a type of bridging finance which is a method of financing, used to maintain liquidity while waiting for an anticipated and reasonably expected inflow of cash. When it comes to borrowing money for different types of business situations, it is important to consider every kind of loan arrangement and determine which one will meet your needs. Along with long-term business loans and lines of credit, there is also the possibility that bridging finance would be a good fit. This type of financial solution is particularly helpful if your business could use some cash to deal with expenses while waiting for the arrival of a significant amount of income.

The general idea behind bridging finance solutions is to provide debtors with the funds needed to continue operations until an anticipated influx of revenue is received. Generally, the debtor will know when that huge amount of cash will arrive and will be in a position to retire the loan around that date. In the interim, the debtor can use the proceeds from the loan to take care of ongoing expenses and keep the company operational.

Depending on the duration of the loan, this approach may be much better than considering other types of funding strategies. For example, the interest applied to the bridge loan may be more competitive than the interest rate that would apply to a business line of credit. When this is the case, the bridging loan will actually mean less out of pocket expense for the debtor.

Equity/ Seedcorn Capital

Equity finance is when you seek finance from external investors in exchange for a percentage of your business. One of the main providers of equity finance is venture capitalists, who invest from a fund of their client’s money. Seedcorn capital is money provided to businesses at the beginning of a project in the hope that it will eventually produce profits.

Grants

Direct grant
This is a cash award, which is usually given out for activities such as training, employment, export development, recruitment or capital investment projects. With a direct grant most schemes usually require the company involved to put up around 50% of the cost.

Repayable grant
Under this type of scheme cash funding is offered for a project with the intention that the sums are paid out of future revenues. However, if the project fails, the grant is written off.

Soft loan
A soft loan is a special type of grant where the terms and conditions of repayment are more generous (or softer) than they would be under normal financial circumstances. So, for example, the interest rates may be less, or there may be no interest to pay at all, and the repayment terms could also be for a longer period.

Asset Purchase Finance

Asset refinance boosts a business’ cash flow by releasing cash against the value of a company’s existing assets. The business therefore sells an asset to a leasing company for its current value, which then leases it back for a specified time period in exchange for regular rental payments. In addition to providing a timely cash flow boost, asset refinance also protects the business from asset depreciation.

Working Capital Providers

Working capital finance is defined as the capital of a business that is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities. For many companies, this is wholly comprised of trade debtors (that is, bills outstanding) and trade creditors (bills the company in question has yet to pay). There are a number of short term and long term sources of working capital financing.

Crowd Funding

Crowd funding describes the collective effort of individuals who network and pool their money, usually via the internet, to support efforts initiated by other people or organizations. After the banks were bailed out by the government they were instructed to re-capitalise. Unfortunately, this meant the withdrawal of credit lines to many UK businesses, who found that overnight their overdraft facilities were removed and loans were being called in.

Simultaneously, the suppression of record low interest rates with the stimulation of inflation (through quantitative easing) has essentially taxed savers and those with a pension who struggle to fight the attrition of their savings. Crowdfunding is used in support of a wide variety of activities, including start up company funding. Crowdfunding models involve a variety of participants. They include the people or organizations that propose the ideas and/or projects to be funded, and the crowd of people who support the proposals. Crowdfunding is then supported by an organization (the "platform") whch brings together the project initiator and the crowd.