Funding your business
There are several ways of funding or financing a business, and the options available will depend on your business’s stage, financial situation, and goals.
Here are some common ways to fund a business:
- Personal savings: If you have savings, this can be an excellent option to finance your business without taking on debt.
- Friends and family: You could ask friends or family to invest in your business. This can be a good option if you have a solid personal network and the people in your network are interested in supporting your venture.
- Bank loans: Banks can offer loans and overdrafts to finance your business. This is a standard option for entrepreneurs, but it can be challenging to secure a loan if you have little or no credit history or need security to back it up.
- Asset-Based Lenders: As the name suggests ABL’s provide funding against specific assets of the business, which may include the debtor ledger (Invoice Finance), particular pieces of equipment (Asset Finance/HP), stock holdings (Stock Finance) or property (Property Finance).
- Supply Chain Finance: Specialist funders effectively enable you to pay upfront for products you sell. Most often used, but not exclusively, when purchasing from abroad or where credit terms are not offered.
- Crowdfunding: Crowdfunding platforms allow you to raise funds from many people, often through social media or other online channels.
- Angel investors: Angel investors are individuals who invest in startups in exchange for equity in the company. This can be a good option if you have a strong business idea and need funding.
- Venture capital: Venture capital firms fund startups in exchange for equity in the company. This can be a good option if you have a high-growth business that needs significant funding.
Researching and considering all available options is essential before deciding on a funding source. Each option has pros and cons; the best choice will depend on your specific situation and needs. The best choice may be a combination of the above, and a Commercial Finance Broker can help you navigate this minefield.
Here are some ways a commercial finance broker can help you identify and secure suitable financing options for your business:
- Assess your financial needs: A commercial finance broker can work with you to assess your business’s financial needs, including the amount of funding required, the repayment terms, and the type of financing that best suits your business goals.
- Identify financing options: A commercial finance broker can help you explore various financing options, including loans, lines of credit, asset-based financing, and equity financing. They can also help you identify suitable lenders or investors to approach based on your specific business needs.
- Review and negotiate terms: A commercial finance broker can help you review and negotiate the terms of financing offers to ensure you get the best possible deal. This may include negotiating interest rates, repayment schedules, and other terms to minimise your costs and risks.
- Submit your application: A commercial finance broker can help you prepare and submit your financing application, ensuring that it is complete and accurate to improve your chances of approval.
- Provide ongoing support: A commercial finance broker can provide ongoing support throughout the financing process, from initial assessment to closing the deal. They can help you navigate any issues and ensure you have the support to fund and grow your business successfully.
Working with a commercial finance broker like Sterling Commercial Finance can be a valuable investment for your business. It can help you secure the right financing on the best possible terms.