7 alternative ways to fund your business

10/02/2015

The funding market is evolving in response to the changing needs of businesses. This move away from traditional sources of finance means that having an open mind is becoming increasingly important when researching funding for your business.

Gone are the days where an overdraft or bank loan are the only options available, but for many businesses making the decision to try something new can be difficult. Yet taking this leap could lead to your business securing a facility that ticks every box and provides the levels of funding and flexibility you require. It could be the best decision you’ve ever made.

Take a look at these 7 ways to finance your business for some alternative funding suggestions:

Invoice finance

Invoice finance solutions allow you to bridge the cash flow gap between providing a service or supplying a product and being paid. Such funding enables you to access this cash tied up in your sales ledger, often a company’s biggest asset, within 24 hours of issuing invoices. Typically up to 90% of the value of the invoice is advanced and the balance is paid to you once your customer’s payment is received, minus fees. See how much you could access…

Asset finance

Asset finance allows businesses to purchase new plant, machinery and equipment whilst protecting their cash flow. Whilst hire purchase, finance leases and operating leases provide a means to purchase new equipment without tying up working capital, asset refinance can release cash against the value of existing business assets. See why businesses are being attracted to asset finance…

Stock finance

If you buy in bulk you may find that you have a surplus of stock sat in a warehouse gathering dust when it could be used to leverage funds. Stock finance releases capital against inventory that would otherwise be tied up as raw materials, work in progress or finished goods. It can be provided as a standalone facility or as part of a wider asset based lending facility. Find out more…

Government Initiatives

There are a range of government initiatives focused on helping SMEs to access funding to stabilise and grow. The Enterprise Finance Guarantee (or EFG) provides loans of between £1,000 and £1 million to SMEs where the government ‘guarantees’ up to 75% of the loan. Other initiatives include the Start Up Loans Scheme, UK Export Finance and GrowthAccelerator.

Peer-To-Peer Lending

Peer-to-peer lending matches borrowers with savers willing to put money aside for longer, hunting for a good return. As the banking middle-man is cut out, borrowers often get slightly lower rates, while savers get far improved headline rates, with the sites themselves profiting via a fee.

Crowdfunding

Crowdfunding is a great option for startups and early stage businesses. You “pitch” your idea or business to potential investors and, if interested, they will contribute a sum to the proposed venture. Then you decide how you want to reward those who helped you make it happen.

Credit insurance

Although not strictly a funding solution, credit insurance protects cash flow against the problems often associated with trading on credit by safeguarding your company against bad debts, either through debtor insolvency or protracted default. It can be provided as a standalone product or as part of an invoice finance facility.

For more information about funding methods available to your business download our free eBook: Your essential guide to funding products