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Access to funding and additional finance for your SME

Whatever point you’re at in the life cycle of your business, there will come a stage where you’ll need additional finance – whether that’s to solve an urgent financial issue in the short term, or to provide the access to funding needed to expand your business operations.

But how do you know what type of financing to opt for? And how do you tie this additional funding into your immediate and future plans for the company?

Money makes the world go round

Your business requires capital to function. Having a strong balance sheet and enough money in the pot helps you survive the choppy waters of the market – particularly in these worrying times where the economic outlook is both uncertain and extremely hard to predict.

So, to use the well-worn phrase, ‘Cash is king!’ and having enough cash to go around will be vital for your success further down the line.

To help underline this, we’ve underlined a few key scenarios where your business may require additional finance, and the reasons behind this.

1. You’ve fallen into a cashflow hole

Poor cashflow can be a big issue for many small businesses. A missed payment from a major customer, or a sudden dip in sales and revenue, can quickly leave you with a hole in your cashflow – and this is a common reason for seeking additional funding.

Fast access to liquid cash is what you need in this situation, and straightforward funding from a lender such as iwoca , or invoice financing from a provider like MarketInvoice , will quickly get you the money that’s need to plug that cash hole.

2. You have key assets you need to purchase

If you’re a business that needs specific equipment, machinery or tools to trade, there will come a time when you need to make a big new purchase – and this can have a dire impact on your bank balance if you don’t finance this new asset in a sensible way.

Asset finance is a good way to fund new purchases allowing you to use the existing investments, inventory and assets on your company balance sheet as security and providing you with the extra funding needed to buy your new equipment.

3. You want to hire a bigger team

Payroll can be one of your biggest costs as a small business. So, when it’s time to grow the team and take on more employees, you’re going to need enough money in the bank to cover your increased payroll costs and hire the talent needed to grow the company.

A secured loan from a provider like Funding Circle is a simple and fast way to provide that extra finance and give you the cash needed to start your talent search.

4. You need to refinance existing loans

If you have existing loans in the business, with less than attractive guarantees, payment terms or interest rates, this can be limiting for your future growth.

Refinancing these liabilities is a great way to remove any personal guarantees from directors and transfer the loans into the business. And by negotiating loans on better terms you will cut down on your monthly repayments and improve your overall cashflow position.

5. You’re aiming for the next stage of growth

When you have ambitious plans to scale up the business, or launch a brand new product to market, you’ll need a big finance injection to fund these growth plans.

Private investment is one route, building a business case for potential investors to show the long-term value of putting their money into your business idea. But in the new 21st century funding market, there plenty of alternative ways to source that finance.

Crowdfunding is one option to explore, with providers such as LendingCrowd or Kickstarter allowing you to set funding goals and crowdfund the finance you need, either through personal investment from the general public, or by providing pre-sales incentives to customers who buy your initial product.

We partner with the funding experts at Capitalise to search 100+ different funding providers, and find you loans at the best possible terms.

Finding the right lenders

It used to be that your high street bank was the go-to destination when extra finance was needed. But with the big banks reining in their support for small business, and cutting back on branch staff, the floodgates have now opened to a host of traditional and alternative lending options – the tricky part is knowing which lender to choose.

At Day Accountants, we work with a range of different funding advisers, finance providers and sources of lending, so we can help you navigate the huge choice of potential funding providers.

If you’re looking for additional finance, at a interest rate that works you, and with a repayment period that suits your income and cashflow position, come and talk to us.

Get in touch to talk through your funding choices