In my fourth blog aimed at start-up businesses we take a moment to consider access to finance and borrowing. So far in this series we have looked at business structure, bookkeeping
and employing staff
. In this piece we focus on financing options available to new businesses.
The traditional starting point for most new businesses is the local bank. Many banks still employ local managers to guide you through options available and your accountant should be able to help with recommendations of suitable banks. For lending purposes banks will likely require you to have a proven track record in your sector and sufficient collateral before they will consider an application. Take advice in advance as a good business plan and set of forecasts prepared by a reputable accountant can carry weight when applying for finance.
There are other third party funding organisations, often run by former bankers, who can either complement bank lending or step in if you do meet the lending criteria of your bank. These funding providers can often design bespoke lending packages and tailor a lending proposal more suited to your needs. Make sure you understand the rate of interest and fees payable with all lending as it is not just about the monthly repayment amount.
Enterprise Agencies are also well worth exploring when you are starting a business. Organisations such as NWES will work with you to develop forecasts, business plans and survival budgets without charge – proving to lenders and yourself that your business idea has potential and is a credible proposition. These organisations can also offer funding themselves by way of a start-up loan and work with you to draft the loan application.
Do not discount grant funding as well. Whilst grant schemes do change regularly, your accountant will be able to advise and even help you with the application. If you are expanding or looking to take on staff there may be financial assistance available. Depending on your sector there may also be bespoke schemes open to you such as SCORE grants in the offshore renewable sector.
You should not feel alone when starting your own business and funding applications can be difficult to complete. At Lovewell Blake we work with you to open the door to funding providers and guide you through the entire process. Please do contact us if we can help.