Fancy yourself in the Dragons Den?
Let's be honest, not many of us are going to get the opportunity to present ourselves to Deborah Meaden in the Den. So what other options do you have when you need some extra financial help in your new start up or expansion in your current business' future? We know how difficult in the past it has been to obtain a loan from the bank, so unless Deb's in your neighbour you best get your swag on before the meeting.
You want to know the business banking staff, develop a dialogue with them and build relationships. Banks are a source of finance and one of the following options may be right for your needs:
- An overdraft facility with set limits at competitive interest rates.
- A short-term borrowing facility so that you can draw down a specific amount to be repaid in a specified number of days.
- A revolving credit facility to enable you to make withdrawals at short notice and unscheduled repayments whenever you have a cash surplus.
- Fixed term loan – at a fixed or variable rate. It’s not only banks that can offer these – building societies, credit companies and Government backed departments such as the Start Up Loan Company (if you are still within your first two years of trading) or other financing options. Many start up and existing business are turning to peer to peer lending to generate income to support growth and innovation.
- Invoice factoring involves selling your invoices to a third party. In exchange they process the invoices. These third parties are called factors or debt factoring companies.
Please always remember to speak to your accountant about the cashflow and tax impact on repaying loans before you take out any finance. It enquiry could be that one phone call that saved your business 'had you have known' to check it out first with a professional who knows your affairs.