Business Funding

Business Funding

Are you looking to find funding for your business? Maybe you are a small business in need of some funds for expansion. Are you a new business and looking for business start up funding? Whatever your business funding needs are, we can help you.

There are many different funding options available:

Debt financing

Debt financing is another type of business funding where you borrow the money and agree to pay it back in a particular time frame at a set interest rate. You will owe the money whether your venture succeeds or not.

Bank loans are what most people typically think of as debt financing and it is attractive as you do not have to sacrifice any ownership of your business. A good option for business funding.

Debt financing is attractive form of business funding because interest on the loan is deductible, and the financing cost is a relatively fixed expense.

Banks are highly regulated in order to minimize the government’s risks from insuring the accounts of depositors. As a consequence, bank lending policies toward small businesses tend to be very conservative.

Equity Financing

Equity financing is where you sell partial ownership of your company in exchange for cash. The investors assume all (or most) of the risk–if the company fails, they lose their money. But if it succeeds, they typically make a far greater return on their investment than interest rates. In other words, equity financing is far more expensive if your company is successful, but far less expensive if it fails. For those who do not negotiate their equity financing properly, there are many potential pitfalls, in addition to the obvious benefits of improving short-term cash flow. Equity financing does not necessarily mean risk-free money. There is no such thing as a free lunch. Equity financing should be considered when thinking about business funding.

Angel Investors are one way of providing finance to your business, although they can be very difficult to find. They are called ‘Angels’ because they often save struggling firms with both finance and advice. Angel investors understand the needs of a new business through their own experience and are able to advise and aid companies they invest with, in many ways. Angels tend to have been very successful running a similar business to ones they tend to provide funding for.

Venture capitalist investors are another type of equity financing. They are private investors ideal for financing new or growing businesses and even struggling established businesses. Venture capital investors are generally high-risk investments but can offer the potential for above-average returns and/or a percentage of ownership of the company.

A venture capital fund is an investment which is often a partnership that primarily invests the financial capital of third-party investors in enterprises and businesses that are often too risky for the standard capital markets or bank loans. Some venture capitalists find themselves partners in the new business they are funding. Most take an active role the businesses although a few, simply provide the funds and step aside, preferring to let the experts handle the day to day details of running their businesses. Venture capital is another form of business funding worth thinking about.

Business Grants

Business Grants are designed to help businesses and they can be the best type of business funding for any startup business.

Grants are sums of money that are given to a business. They have often been called free money but beware as that might not be the case. There is no interest to be paid and funds are not usually returnable – as long as the terms of the grant are met.

Finding grants for businesses can be hard. They are provided by central, regional and local government, the European Union, and a number of other national and local bodies.

Most business grants are given to limited companies, partnerships and sole traders and also cooperatives. You will find the the location of your business will be crucial with regards to obtaining a grant.

For more information obtaining grant finance for your business funding needs, please fill in our online form today.

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