BLOG: 04 MARCH 2016
4 KEY ELEMENTS TO CONSIDER AS AN SME LOOKING FOR THE RIGHT FUNDING ROUTE...
Throughout any business life span, it is likely that at some stage, funding will be required as a helping hand, whether that be to help get them off the ground, push through a financially difficult time or purchase an asset. With increasingly more options when it comes to funding, there are endless routes to go down which can make things confusing, so once you have identified the need for funding, how do you go about deciding the best route for your business?
1. Identify your businesses needs
It is essential that you have a full understanding of the funding requirement of your business, which will in turn allow you to select the most relevant type of finance. Ask yourself questions like:
2. What type of funding do you need for your business?
Once you have clearly identified your business needs, you are then able to narrow down your search to the type of funding you require. The category your business falls into when it comes to the ideal type of funding you require is entirely dependent on what you will be needing the funding for. To identify the funding your business needs, try asking yourself some of the following questions:
3. Know and access the market around you
After point one and two, hopefully you will have come to a decision on the type of funding you will need for your business – great stuff! The next step is ensuring that you gain a full understanding of the potential lenders for you, and you can do this by using online comparison sites such as Funding Options to do this. Using these sites will allow you to gain a comprehensive understanding of what is available to you – just like when using comparison sites to find the best holiday for your family!
4. Ensure you clearly understand your obligations and responsibilities
We can’t stress this enough! Once you have found a funder that is the right fit, it is down to the directors and owners of the business to deliver on their end of the bargain. They will have the responsibility of ensuring they meet all terms of the contact they have entered into. However, if there is any particular difficulty with regards to any conditions within the agreement, don’t keep quiet – say something! Working with a flexible and partnership based approach, it is important for both the business and the funder to work in conjunction with each other in order to achieve the best end result possible for both parties.
After following the above points and asking yourself those essential questions, hopefully you will be able to access the most suitable type of funding for your business. If you come to the conclusion that the route you need to go down is trade finance or asset finance, please don’t hesitate to get in touch with a member of our friendly team to find out how we can help.
1. Identify your businesses needs
It is essential that you have a full understanding of the funding requirement of your business, which will in turn allow you to select the most relevant type of finance. Ask yourself questions like:
- Why do I need this funding?
- How much will I need?
- How long will I need it for?
2. What type of funding do you need for your business?
Once you have clearly identified your business needs, you are then able to narrow down your search to the type of funding you require. The category your business falls into when it comes to the ideal type of funding you require is entirely dependent on what you will be needing the funding for. To identify the funding your business needs, try asking yourself some of the following questions:
- Do you need the funding to grow the business in the long-term or for day-to-day cash flow limitations?
- Are you willing to give up some equity?
- Do you have assets you could finance?
- What security are you able to give?
3. Know and access the market around you
After point one and two, hopefully you will have come to a decision on the type of funding you will need for your business – great stuff! The next step is ensuring that you gain a full understanding of the potential lenders for you, and you can do this by using online comparison sites such as Funding Options to do this. Using these sites will allow you to gain a comprehensive understanding of what is available to you – just like when using comparison sites to find the best holiday for your family!
4. Ensure you clearly understand your obligations and responsibilities
We can’t stress this enough! Once you have found a funder that is the right fit, it is down to the directors and owners of the business to deliver on their end of the bargain. They will have the responsibility of ensuring they meet all terms of the contact they have entered into. However, if there is any particular difficulty with regards to any conditions within the agreement, don’t keep quiet – say something! Working with a flexible and partnership based approach, it is important for both the business and the funder to work in conjunction with each other in order to achieve the best end result possible for both parties.
After following the above points and asking yourself those essential questions, hopefully you will be able to access the most suitable type of funding for your business. If you come to the conclusion that the route you need to go down is trade finance or asset finance, please don’t hesitate to get in touch with a member of our friendly team to find out how we can help.
