Finance support and information

With a huge amount of finance on offer to businesses at all stages of development it can be difficult to wrap your head around everything.

A quick overview of the traditional ways you can finance your business is a good place to start.

Your personal funds

If you are prepared to take the risks that come with investing in your own business, then this is a low-cost option as you won’t be paying interest to anyone. Ensure you have enough money in the bank to get you through tough times though.

Business overdrafts

As with using personal funds, be careful not to overdo it when using your overdraft to fund business transactions, as you will likely be paying interest on it. However, as a short-term solution to fluctuations in your cash flow, there aren’t many better options.

Grants and vouchers

Grants tend to be one-off and non-returnable and will often be awarded for something specific that you want to do within your business. There are plenty of local and national grant and voucher schemes available at any given time.

Loans

The classic source of finance for a business, a loan can cover the cost of a multitude of necessary purchases and payments. Always check the interest rates payable on any loan you take out and ensure you can pay it back in the agreed timeframe.

If you have a loan application rejected by one of the 9 biggest UK banks, from November 2016, they will pass your details to alternative funding options. This referral system is organized by the British Business Bank.

The government website is one place for you to search for loans that may be suitable for your business. Use the check-box on the left of the page to refine your search and try searching for loans by postcode to find schemes closer to home.

Invoice financing

Invoice financing is where a third party agrees to buy your unpaid invoices for a fee. Invoice financiers can be independent, or part of a bank or financial institution. There are pros and cons to this approach, but it can get you sums of money that are owed to you quicker than you would otherwise get them.

Leasing and asset finance

This is where you lease or rent machinery, office equipment or other expensive items to save you the initial costs of buying them outright. This could secure you higher quality equipment than you would otherwise get your hands on, but you won’t own the items outright and will have to return them at the end of the agreement.

Investment finance

If you are prepared to sell off part of your business to an investor, this could bring finance and expertise into your business. It may take time to find the right investor, but if you do, it should be worth the wait. Note that this option isn’t available to sole traders as only limited companies can sell off shares.

Finance support and information

There are sources of support out there to help you understand the options available to you and make the right decisions for your business.

Business finance explained

As you would expect, the government website is full of information about the types of finance you can receive, with hundreds of funding opportunities typically available at any given time.

Better Business Finance

Better Business Finance provides impartial information and support to businesses and entrepreneurs seeking finance in order to develop and grow. One of its core aims is to improve access to finance for businesses.

Free initial advice sessions with a Chartered Accountant

Search for an ICAEW Chartered Accountant in your local area and you can get a free initial advice session with valuable business support tailored your business needs.