Now that the economy is firmly on the mend, management teams have a new challenge to think about and that is how do they obtain the funding that they need for the growth that they are now experiencing. It is vital to remember that more companies go to the wall in a recovery than fail in a recession. Over trading is a very real danger.
The best place always to go for funding is your own bank. You have a history with them and they should understand your business better than any other funder. Unfortunately over the last 6 months bank lending to businesses has fallen by a staggering £4 Billion.
So if your business is growing and your bank is not lending, then who do you turn to?
There are many independent sources of finance for growing companies. The independents are much more flexible in their terms and their attitudes and being smaller you are much more important to them.
Invoice Discounting and Factoring is one of the easiest to obtain and most flexible ways of raising finance for growth as this form of finance grows as your sales grow. If you do not want to or need to sign up for a full ledger facility then consider using selective or single invoice discounting. You just finance the invoices that you want to when you want to.
Trade Finance is also available to finance firm orders that you have won but where you do not have the resources to fulfil. The trade finance provider will purchase the goods for you and after you have delivered and invoiced you then pay the loan back.
Debt Crowdfunding is another interesting a quick way of raising funds from £5,000 to £1,000,000 for companies that have 2 years of accounts filed at Companies House. This is where ordinary members of the public ‘Crowd’ together to lend small amounts that aggregate into one loan for a business.
Short Term Loans This type of loan has sprung up since the beginning of the year. These companies lend from £3,000 to £100,000, depending on risk, for periods of 1 to 12 months, for companies that have been trading for at least 12 months. Some will lend to companies with adverse credit histories but then must not have any CCJs. This type of funding is very useful for purchasing stock that is fast moving and where the profit margins are good.
To learn more contact Peter Kelly on 01932 244810 or firstname.lastname@example.org