Don’t let finance put a stop to your business plans
A recent Experian Business Assist survey asked the owners of UK small and medium sized businesses what their main priority was for 2018, to which a staggering 68% responded with ‘increasing sales and profibility’1.
However, to be able to grow an injection of cash is often needed and as the saying goes ‘you must speculate to accumulate.’
But accessing finance as a new or young business takes time and patience as Tamika Martin, Founder of Ucreate PR & Events Management Ltd and Nottingham Post Business Entrepreneur of the Year 2016, explained in a recent interview “If you’re going to launch a business and you haven’t looked up options of where the revenue streams are going to come from – that can prove to be quite a barrier and it can be frustrating if you don’t know what to do or where to turn.”
It’s important to remember at this stage that there are so many different ways for a business to access finance – but research is key, as Tamika continued “You need to do your research with regards to grants, loans, investors, etc. and establish a clear direction of where the revenue is going to come from.”
What are some of the finance options available and where should you look?
Bank loans: With research from the British Business Bank showing that 72% of smaller business loan applications were approved2, it’s definitely worth keeping a business bank loan in mind.
If you know the amount you’d like to borrow and the interest rate, a business loan calculator can give you a good idea of your monthly repayments.
Start-up Loans: If you’re a first time start-up, Start-Up Loans could be the finance option for you. A Government backed scheme with the added benefit of support and mentoring.
Grants: Depending on the sector of choice for your new business, a range of grants may be available. It’s worth doing some research and contacting relevant trade associations and governing bodies, or visiting gov.uk.
Alternative finance: If a traditional loan isn’t for you and a grant doesn’t seem feasible, there are plenty of alternative finance options available. Everything from peer-to-peer lending to angel investments to the increasingly popular crowdfunding – there are options to suit most businesses and information is readily available online.
Before applying for any type of finance, it’s important to be prepared:
- Have a business plan
Make sure you have a business plan ready. It doesn’t have to be the final version, but as Tamika explains it’s a vital document to have from the beginning: “(A business plan) can change as you grow but just having a basic plan outlining the direction you want your business to go and how it will get there, is very important in the early stages.”
- Know your numbers
We’ve all seen Dragon’s Den and The Apprentice haven’t we? Whether you love them or hate them, these programmes highlight the importance of having numbers that add up. But this shouldn’t only apply to your sales and revenue numbers, also prepare how much you’d like to borrow and over how long.
- Check your business credit score
A healthy business credit score can help stand you in a better position to secure finance. Monitoring your business credit score in advance with services such as Experian My Business Profile, gives you the opportunity to work towards improving your score should you need to.
Take steps to improve your business credit score and unlock opportunity. Click here for more information on Experian My Business Profile and to start your 30-day free trial.
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1. Experian survey was conducted between December 2017 and January 2018. In total, 115 small and medium sized businesses took part in the survey.