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Raising small business finance

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With the credit crunch still biting hard the availability of bank finance is a sore point for most business people.

The situation is particularly bad for small businesses, typically perceived as risky by bank underwriters. Bank credit terms offered to small businesses are so poor they can represent a glass ceiling to growth.

While no magic bullet out there to the banking crisis, these are some of the alternatives worth considering:

Family and friends – With returns on traditional bank deposits at an all time low many family members are already likely to be seeking alternatives for their investments. If your funding requirements and terms fit their risk profile it may be worth talking it through.

Lending against assets – Traditionally this means lending against the sales ledger of the business or invoice discounting. Though this may be an option for you, there are alternatives forms such as borrowing against stock, brands and plant and machinery.

Grants – Though these are harder to access at the moment, don’t dismiss the possibility out of hand. The Enterprise Finance Guarantee is targeted at SME’s with strong business plans and the inability to provide security needed for a loan. These schemes can support 75% of a loan up to £1m.

Many more options are available but may be unique to your businesses circumstances.

If you would like to talk to us about you business call us on 0121 270 6305.