Raising Finance
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Trying to raise finance quickly to exploit a business opportunity can be very challenging and expert assistance is required to ensure all possibilities are considered to arrive at the correct decision for your business. Inspired Business Vision have the in-depth knowledge and experience across all types of finance to guide you to the correct decision.

The source of finance most appropriate to you will depend on the nature of the business opportunity – be it a business acquisition, major project, market expansion or substantial customer growth. But it will probably depend even more on your company’s stage of development and the finance already available to you. . Whether it’s early stage equity for a start up venture, expansion capital for a growing business, or a refinance package for a mature company, our experience, objectivity and network of contacts mean we’re often able to bring a fresh perspective to the situation.

There are two main types of finance: debt and equity. Debt finance is more common and, in normal circumstances, it is easier to access. Debt finance includes bank overdrafts, bank loans, asset finance, hire purchase and leasing, factoring and invoice discounting.
However, the financial crisis has made it more difficult to access debt finance. Even smaller companies that are serious about growth have begun to consider external equity investment. Small-scale equity investment is available from business angels, venture capitalists and regional venture capital funds.

The main sources of finance available for SME businesses are as follows:

Bank Finance

There are several types of bank finance available to your business, with different packages available to suit your needs as your business requirements change. The type of finance that would best suit your business may well be based on the proposed use, and how quickly you need finance, and how quickly you could repay it. Overdrafts are used in conjunction with business bank accounts and are a flexible source of working capital for short-term needs. For longer term requirements, bank loans are often used to fund for example the purchase of plant and machinery. The term of the loan will vary dependent on the circumstances. Banks will also provide commercial mortgages for the purchase of property, though in the current economic climate substantial deposits are required to obtain mortgages.

Asset Finance, Hire Purchase and Leasing

This allows businesses to spread the ownership associated with buying assets. When you buy assets through leasing finance, the leasing bank buys the equipment for you to use, in exchange for regular payments. Leasing or hire purchase can help you maintain cashflow, and allow greater flexibility in upgrading equipment.

Confidential Invoice Discounting & Factoring

This offers ways to access working capital by unlocking the value of invoices, although interest rates and charges apply on the cash advanced. Confidential  invoice discounting allows you to draw on funding secured against approved invoices and keeps the facility confidential from your customers, while in factoring you can sell invoices to your financier and your customers will be aware of this arrangement.

Friends and Family

It is common for SME businesses to seek funding from friends and family when requiring finance, whether it be for starting a business or for expansion. If borrowing from Friends or family it is essential that the terms of the financing are agreed at the start, and whether it is a loan or for part of the equity of a business. All funding arrangements should be documented as they would be with a third party funder to avoid disputes later on.

Shares and Equity Finance

Equity finance is a way of raising share capital from external investors in return for handing over a share of the business. This may take many forms, including a share of future profits, but is most frequently associated with sharing the ownership of the business to some degree.

The two main providers of equity finance for private businesses are venture capitalists - also known as private equity firms - and business angels - who are high net worth individuals.

Regional Funds and Grants

There are a number of funding initiatives in different areas comprising of funding by way of loans and equity. Grants are also available depending on circumstances and the area of the country your business is in.

Whatever your requirements, and however you plan to raise finance, preparing a business plan is essential for any potential lender or investor to consider. Inspired Business Vision will be able to offer timely advice and help you to evaluate your options and assist in the business plan preparation.

Contact Us now to see how we can help your business with raising finance.

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