Written by Rob Straathof, Chief Executive Officer, Liberis
Whether you are looking to kickstart your own venture or take the next big step with an existing project – when it comes to business growth, it’s more than likely that you’ll need funding to support your plans. For some this can help to balance cash flow or buy new equipment, and for others it can fund taking on more staff or generally expanding the business.
Although many owners will default to a bank loan, this solution isn’t always viable for younger businesses. Fortunately, there are numerous other funding options available these days which is great news for businesses of all sizes and stages. However, it is important to weigh up all of your options carefully to make sure you go for the finance best suited to your individual business needs.
With this in mind, Liberis have gathered the following funding solutions for you to consider:
Crowdfunding is a good option for businesses that focus on raising funds for a particular purpose or project – for instance, fitting a new outdoor area in your pub to benefit summer punters. To get started with crowdfunding, businesses can set up a funding campaign page where they can receive donations from a community of investors who are looking to support them. It is worth noting that there are usually some fees involved during the set up and it’s definitely worth sharing how the raised funds will be used to support your cause and encourage investment. If you have a strong community presence or an innovative business idea, this could be a worthy option for you!
Another option to explore is applying 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 often benefits attached to it such as business support and mentoring. You can 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 also offers a Start Up Loan for businesses looking to open or grow their businesses. Unlike a business loan this is an unsecured personal loan and has many benefits including an annual 6% fixed interest rate. The Start Up Loan can be repayed over a period of one to five years, plus there’s no application and early repayment fee. You can 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 backing for businesses that are just starting out. In exchange for their investment they will usually have a stake in the company and, in some cases, may want to have some sort of an involvement in the business as well (this will need to be agreed between the business and investor). This set up benefits the investor if the business starts to make profits as they also gain financially. However, if the business makes 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 can be a great finance option for businesses who already have a steady cash flow. This type of funding allows businesses to receive funds in the form of outstanding invoices. The amount of funds you can receive depends on your annual turnover and the 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.
Take time to consider your options; and once you have done, it’s time to take your business to the next level!