Getting finance for your growing business

posted by 3 weeks ago in Features
Finance for Business Growth

Having a killer business idea doesn’t always guarantee success, even once a business is established and seemingly profitable the future can be uncertain. Cliche’s such as “you need to spend money to make money” may make some of us shudder nervously, but access to funding and fluid cash-flow are often critical to growth.

How do you plan on growing your business?

It’s a familiar circle for many growing businesses – you need cash to execute your plans, but you won’t get the uplift in sales until you’ve actually put the operational systems in place, and for that you need money… Chicken and egg.

This may be to purchase equipment, buy stock ahead of a peak period or bring in specially skilled staff to allow you to take on a lucrative project. Businesses who work in seasonal sectors – such as hospitality or beauty, are often painfully aware of the opportunity that Christmas or Summer might offer, but the cost of buying stock to service the uplift means running the coffers empty.

This might be a good time to consider short term finance for your business and there are a number of options out there.

When should you apply for finance for your business?

The idea of getting into debt early in a businesses’ life cycle may be met by some trepidation on the part of the owners. However securing investment allows businesses a new level of flexibility. Business owners may feel that if they are already doing well, a safer route may be to wait until they can afford these things, but this is a risky strategy.

If the opportunity for growth presents itself and business is thriving, then it should be capitalised on in that moment. After all, should the pace slow down, then the chances of being accepted for a small business loan may start to dwindle too.

What other business finance options are there?

Of course a small business loan isn’t the only way to secure finance for business and promote growth. Sone options might include:

Invoice Finance

Long payment terms such as NET60/90 often means businesses know they are going to get their money, but need it earlier than the client is due to pay it. This is where Invoice Finance can be useful – for a small % of the invoice total, the lender can pay you ahead of the client settling the bill.

Merchant Cash Advance

Another way to obtain finance for businesses that’s been growing in popularity is something known as a ‘merchant cash advance.’ This can be offered without credit checks and isn’t secured to the business in the way a small business loan is. Any company that holds an electric card terminal for payments can apply for this. The lender will operate through this, giving them visibility of the company’s transactions. The lender can then use this information to offer a reasonable amount of credit to the business and offer a payment plan both parties consider realistic.

Tax Loans

Sometimes as a business owner, finance can look fluid – until you realise there’s a large VAT bill or tax bill due that wipes out everything you have amassed! This is where we can help, with Tax Loan’s over a 3 month basis designed to cover your tax obligations allowing you to use the capital you have for investment in your business.

Comparing your options

We understand that investigating the various options of finance for businesses is a daunting task; sometimes knowing where to start or how to begin each process can be confusing. There’s also the question deciding if finance is needed and if it is, which of the above options is best most suitable?

At BusinessComparison we are experts in raising finance, we understand these concerns and aim to help as many businesses as we can. No credit checks are performed until you actually proceed in making an application.