A business can raise finance in any number of ways should they wish to. There are many lenders operating in the marketplace today that have money to lend and are willing to do so.
This makes your job much more difficult when looking to raise finance for your business or project because without understanding the intricacies of the different finance products you could prevent business growth in the future.
Raising finance for business is unlike comparing personal finance products such as credit cards, mortgages or overdrafts.
This is because there are so many variables within a business that can affect their ability to be successful when looking to raise finance. Things such as Cash flow, shareholding, business structure, length of time trading, customer profile, suppliers, industry, payment terms to name just a few; all of these affect a business’s ability to raise finance.
Combining this with the various different financial products on the marketplace and the parameters of each of the funders mean that as a lay-person you are never comparing eggs with eggs!
It’s our job to know about these intricacies, which funders supply which products and what kind of businesses they prefer to lend to.
SME’s are increasingly finding their existing overdraft facilities too restrictive and with the banks being unwilling to lend more whilst also requiring more personal security and higher fees, the business owner must look elsewhere to secure alternative funding for your business.
This has allowed alternative forms of funding to step in and fill some of the vacuum, with a variety of flexible facilities being available such as asset based lending. Many businesses have capital tied up in assets, such as stock, plant & machinery and property. Asset based lending allows the cash held within these assets to be released into the business, giving you fast access to substantial sums of working capital.