Financing your business

Raising finance for businesses following the recession is challenging to say the least. If you are thinking of expanding your business, or starting a new one, you will probably need to raise finance. This requires careful planning and good professional advice. It is generally wise to seek financing from a number of finance sources. This will give you greater prospects of funding and flexibility in the long term. Some of the more common sources are:

• Overdraft
• Loan
• Mortgage
• Selling an interest to a partner
• Share issue for your company
• Hire purchase
• Leasing
• Debt factoring
• Assistance from Government-backed schemes e.g. National Loan Guarantee Scheme and from regional authorities
• Venture capital

It is important to do a comparative study of the costs of each possibility, and also consider any tax implications before making a final decision about who to approach. This is an area where we have considerable experience, networks and expertise.

Most lenders will require some form of security. No amount of security will make a bad plan good, but it does demonstrate commitment from your side and provide insurance for the lender. As one banker recently said 'If they're not prepared to take a risk, why should we?' Generally acceptable forms of security include:

• Charge over a specific asset or class of assets e.g. car / debtors
• Fixed or floating charge over your business assets
• Second mortgage on your home
• Personal guarantees

Again, you might consider using more than one form of security. If the lender requires personal guarantees you should proceed with great caution. Try to ensure that any such guarantees are limited in amount, if not in time. You will almost certainly be required to present a comprehensive and convincing business plan to show how you are going to service the loan. In essence, this must demonstrate that you will be able to meet the new commitment through sustained growth in your business.

In all three areas - choosing a finance source, securing the finance, and preparing a business plan - you will benefit greatly from our professional advice. Why not arrange to meet with us and take advantage of our in-house expertise and extensive network of contacts? We might even be able to help you refinance your existing commitments to your advantage.