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While some use these funds for balancing cash flow, some buy new and required equipment with it, while others generally expand their business.
Owners usually opt for bank loans, and this solution isn’t always viable for younger businesses. Fortunately, there are numerous other funding options available these days which suit businesses of all sizes and stages. However, it is important you weigh all the options carefully to ensure you go for what best suits your business needs.
Crowdfunding can be a good option for businesses that focus on raising funds for a particular purpose or project - for instance, setting up an outdoor area in your pub to increase footfall in the summers. For initiating crowdfunding, businesses can set up a funding campaign page where they can receive donations from investors who would like to support them. However, there is usually some fees involved during the set up and updating investors on how the funds were used often encourages investment. If you have a strong community presence or an innovative business idea, this could be a worthy option for you!
For Government grants, you’ll need to meet the criteria to be eligible but the best thing about this type of funding is that you won’t need to repay the amount, and there are benefits attached to it as well, which are often business support and mentoring. Visit the gov.uk web page to learn more about the different grants available and offered in your area.
Start Up Business Loan
The UK government offers Start Up Loans for businesses that are looking to open or grow. Unlike a business loan, this is an unsecured personal loan and has benefits that include an annual 6% fixed interest rate. This loan can be repayed between one- five years and there’s no application or early repayment fee. Visit the gov.uk web page to find out more.
Business Cash Advance
Liberis’ Business Cash Advance provides a flexible option for businesses who need quick and simple cash injection. You can borrow anything between £2,500 and £300,000 at one fixed cost - with no APR, harsh varying terms or penalty fees, ever. The Business Cash Advance works by taking an agreed percentage of your credit and debit card takings until the funding amount and fee is paid off - working perfectly in line with your cashflow, and ideal for seasonal businesses.
To be eligible, you need to have been trading for over four months and be taking £2,500 per month in card takings. You can visit the Liberis website to find out if a Business Cash Advance is the right option for you!
Angel investors are individuals who provide financial support to businesses that have just begun their journey. In exchange for their investment they usually have a stake in the company and, sometimes also prefer some sort of an involvement in the business (this is usually agreed between the business and investor). This set up benefits the investor if the business takes off and starts making profits as they also gain financially. However, if the business suffers a loss or folds, the investor would not be entitled to claim back any of the initial investment. You can list your company on AngelList to get an idea of the other businesses and Angel investors that are out there!
Invoice financing is ideal for businesses who already have a steady cash flow. It allows businesses to receive funds in the form of outstanding invoices. The amount of funds you receive depends on the annual turnover and value of your outstanding invoices. This option is suitable for businesses that are growing quickly and sell products or services to other businesses. In order to get the best deal, shopping around and comparing different providers always helps.
Think carefully as you look at the options as right funding can help you take your business to the next level!
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