Supporting your business financially is imperative to its survival. But what is the best route to take? We have made things simple by listing the 6 best types of financial support for your business, so you can make it thrive, grow, or develop into the business you know it should be.
Small Business Loans
Whether it is a traditional loan from the bank, payday loans from direct lenders or any other form of loan, these can provide your business with finance at reasonable rate. Fund your next venture easily. This is especially beneficial for businesses who are already generating revenue. Any type of loan is debt finance, so always read the agreement carefully and be aware that you must have the means to pay it back.
Start-up loans
Start-up loans are a government stimulus package. This allows you to access funding for a low-cost loan. This is an excellent means of funding a new venture or expanding upon an existing small business. Often, up to £10,000 is available for those starting out, as well as those looking to expand. These terms are usually very favourable, compared to traditional lenders, but you must be aware that the company will not own this loan, but rather the individual who takes it out.
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Business Grants
In the UK, local authorities are private organisation alike are able to provide funding and grant opportunities for funding. These grants usually are available for new companies or existing business. Eligibility for a small business grant is determined by certain criteria. You must apply, before going through a vetting process, which will either deem you eligible or ineligible. The number one benefit of grant funding is that you don’t have to pay it back.
Accelerators
This is a form of programme that offers developing business a small investment. Usually in exchange for equity, mentorship and network access, this enables them to become self-sufficient in the long term. Additionally, this initiative will allow future investors access once entrepreneurs have completed the business accelerator programme.
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Business overdrafts
This form of finance is extremely effective, allowing you to set up funding in an exceptionally fast way. Even when your balance hits zero, you will be able to access money and continue making necessary payments, all within the parameters you have arranged with your bank. An overdraft for your business can be a great option, however, higher interest rates will be put in place than conventional loans.
Crowdfunding
Crowdfunding platform will allow you to raise the funds your need from external contributions. This can either be run an equity-based crowdfunding campaign, or a reward-based crowdfunding campaign, where your depositors obtain bonuses or incentives in exchange for their donations. It should be noted that it will usually take quite a lot of time, comparative to the preparation period, to successfully run a campaign such as this. Furthermore, even though it may take up time, it can be an excellent means of obtaining alternative finance when you need it most.
