The market’s options for business finance have rarely been more diverse or dynamic than they are today.

Here we’ll examine just a few of the potential routes open to you.

Some background

From a potential lender’s viewpoint, there are typically three generic characteristics of a business seeking a capital injection:

  • it has encountered a short-term cash flow or other funding problem. Typically the business remains viable and offers potential for future success. The current problems are likely to be relatively easy to resolve with a little time and some bridging finance to help.

Examples in this area might include a business struggling to get its bills paid on time by a major client or perhaps some problems have been encountered due to currency fluctuations and the lack of forward forex contracts;

  • it is successful and wishes to expand and grow its activities, requiring finance to do so. Examples here might include expansion overseas or the purchase of new and expensive capital equipment;
  • its basic business performance is not generating sufficient profits for survival. This might be for any number of serious strategic reasons, such as a flawed business proposition or an incorrectly structured company. Such problems may be difficult to remedy in the short term and expensive overall. In some cases, they may question the basic viability of the business.

Examples here might include being unable to complete on price with overseas competitors in lower-cost economies or offering goods/services for which there is little market demand.

Each of these three categories may require a different approach when trying to compare business loans.

The types of finance

At See Business Loans, we’re experts in comparing business loans and finding solutions.

Even so, it’s impossible to say in advance which solutions might be applicable to your business. To do so, we’d need to sit down and analyse your position with you, so that we could identify some potential solutions.

That’s because as the above breakdown of company characteristics indicates, depending upon your position, some funding sources might be far more appropriate than others.

For example, some fund providers specialise in helping overcome short-term cash flow woes. Examples of solutions in that area might include:

  • invoice factoring;
  • invoice discounting;
  • short to medium term directors’ loans; etc.

In other situations, it might be more beneficial to consider funding through solutions such as HP (Hire Purchase) where capital equipment is required for expansion or perhaps equity re-capitalisation, which essentially involves lending based around equity you might have tied up in existing assets.

Yet other options might include Business Angels – typically wealthy individuals who might be willing to inject finance into businesses they believe have potential for the future. They’re typically more risk-inclined than some funds providers but they might wish to take a share in your business, perhaps for a limited period, to protect their investment.

To start thinking about how to compare business loans, we would need to get things started by having some initial discussions with you to understand just where your business currently stands.

General principles

As a brief introduction, here are a few general points about finding business finance:

  • it’s typically always easier if your reasons for the finance request are positive (expansion, cash-flow, growth, new product development) than if they’re negative (your business proposition is fundamentally flawed);
  • to obtain business loans, you’ll typically need to show that you’re an existing business with some form of demonstrable track record – usually in the form of accounts. Green field “start-up” finance is available but it’s typically regarded as a separate form of business lending;
  • in the case of smaller businesses and sole traders operating as a Limited Company, your own personal credit history will typically be examined.

Why not find out more by contacting us without delay?

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