The three major types of funding are:
When Raising Money, first impressions count.
Get it right from the start, engage with professionals who have expertise with both raising and providing finance.
Find out which options are available to you, what is the best possible mixture and their impact
* importance of considering ALL options available to you
We have contacts with many funders and success in finance raising
* crucial to understand the implications of the different sources of raising money
We analyse and properly weigh up all costs and benefits
It is good to start by looking if your company has any hidden cash, because this is free. Other alternatives include:
Leasing / Invoice or Working Capital Financing / Hire Purchase: these are all tied to specific assets e.g. fixed assets such as vehicles, printers etc (leasing/HP) or current assets i.e. debtors (invoice financing)
Grants: The big bonus here is that they do not require any repayment – however, successfully applying for grants can be extremely onerous.
When raising funds through equity (selling shares) you basically ‘share ownership’ with the provider of the equity funds (new shareholders). This means that the equity investor shares in the risk and rewards of your business.
In comparison with all forms of debt, the risk to an equity provider is higher and consequently, the potential rewards are higher. It is essentially selling off a part of the business.
Any arms-length financier will expect full technical competence in understanding how your business and industry works with a thorough grasp of your current and future finances. Additionally, they will obviously expect clarity on how they earn their returns. In terms of formal documents both these as aspects should be reflected in:
If you offer considerable security (eg alternative assets which can refund a loan in full) and a proven ability to generate cashflow, its possible to raise money in a matter of days and pay a low interest rate on it or as the cliché goes – it’s easy to borrow money when you don’t need it!. At the other extreme, raising 100% finance for a new standalone business can take years with an extremely low chance of success.
Financiers will want reassurance that good financial processes are in place with accurate and timely reporting an absolute must. They’ll closely monitor how actual results match up with planned forecasts, so you need the right systems and people in place at the outset.
If you any questions please get in touch using the contact details below, or using the form and we’ll get in touch with you as soon as possible.