10 ways to fund your business

30/04/2018

While it’s true that many businesses are still finding it tough to secure funding, there is a wide range of possibilities that exist if you’re looking in the right place.

Too often, the search process begins and ends at the bank after a loan or overdraft application is rejected, but an open mind and a preparedness to explore all possible avenues could result in your business finding the funding it requires to meet its objectives.

Here, we look at 10 popular funding solutions that could be worth exploring:

1. Invoice finance

How much cash do you have tied up in unpaid invoices? With factoring and invoice discounting, you can access up to 90% of your sales ledger value within 24 hours of an invoice being raised to bridge the cash flow gap between providing a service or supplying a product and being paid. Factoring also sees the funder provide a sales ledger management service to supply additional expertise and reduce the resource burden. Get a quote here…

2. Asset based lending

Commonly known as ABL and with an invoice finance facility at its core, asset based lending releases cash against a range of additional assets on the balance sheet, including property, plant, machinery and stock. Read more about ABL…

3. Asset finance

Asset finance solutions overcome the cash flow challenges posed by purchasing new equipment, plant or machinery. While hire purchase allows you to pay for an asset in regular instalments, finance and operating leases see businesses lease the asset for a specified period. How to make the most of your assets…

4. Credit insurance

Although not strictly a funding solution, credit insurance is no less important in the current climate that’s riddled with late payment. Facilities will safeguard your cash flow against late or non-payment, either through debtor insolvency or protracted default, and can be provided either as a standalone product or as part of an invoice finance facility. Find out more…

5. Equity finance

Popularised by the BBC’s Dragon’s Den television show, equity finance sees businesses gain investment from business angels and venture capitalists in return for a share of the company. In addition to the funding that’s provided, a major advantage is the input and expertise offered by the investor, who will help to drive the business forward. Read more here…

6. Enterprise Finance Guarantee

One of the most successful of the government’s lending initiatives, the Enterprise Finance Guarantee (or EFG) provides loans of between £1,000 and £1 million to SMEs. With the government ‘guaranteeing’ up to 75% of the loan, it lowers the risk to the funder and can be used to support new loans, refinance existing loans or to convert all or part of an existing overdraft into a loan that is repayable over a period of up to 10 years.

7. Trade finance

Trade finance options are extremely useful for businesses who export or import. They help to bridge the payment gap commonly experienced with trading overseas, and can additionally provide support with language and cultural differences when collecting monies owed. More about the options available…

8. Property finance

Is your business benefiting from the most suitable commercial mortgage that’s available? Or could you raise vital funds against your property through sale and leaseback? Your property will no doubt represent one of your largest assets – make sure you’re utilising it effectively. Find out more…

9. Payroll finance

Payroll finance helps to overcome the cash flow challenges associated with paying wages by advancing the funds to cover this, in addition to the tax and National Insurance contributions. Facilities can also incorporate a back office outsourcing function to reduce in-house overheads. How could this help?

10. Stock finance

Again, your unused stock can tie up a lot of cash. Stock finance will release funding against the value of raw materials, work in progress or finished goods, but it is only available as part of a wider asset based lending facility that incorporates invoice finance. Get an instant quote here…

As an independent commercial finance broker, Hilton-Baird Financial Solutions can introduce the most suitable facility on the market for your business’s requirements and objectives. Call us on 0800 9774833 or email info@hiltonbaird.co.uk to speak to our team of funding consultants.