Business Finance Advice for Small Businesses in Cumbria

One of the main challenges for a growing business is funding that growth. If you imagine a business as a vehicle, the faster and further you want to travel, the more fuel the engine will need to inject and burn. For a growing business, it needs cash as fuel to power your businesses engine.

One of the main reasons why business growth stalls or companies fail is due to lack of funds and being unable to finance the cashflow requirements.

However, help is at hand. There are business finance consultancy services available. I have had extensive experience in helping many SMEs through my experience . 

Therefore, if you want to develop and grow your business, or change your operating model, but lack of surplus and available cash is holding you back, please do get in touch.

Bank overdraft facility or bank loan: Bank loan facilities can be at competitive interest rates. If your business is less than 3 years old, or has had a difficult trading period, or lacks net worth, reserves on its balance sheet, a bank loan may be difficult to secure. You may need to find additional business funding solutions to support the banks risk in taking on the loan facility to your business.

Finance Houses and Finance Brokers: There are a good number of independent business finance companies to help with working capital requirements, and asset finance options for investing in vehicles, plant, equipment and machinery.  There are many finance brokers who can take the leg work out of finding a suitable finance solution. Rates and loan facility costs will be higher than the mainstream banks. Despite that, looking at these options is often a good solution for many businesses.

Crowd Funding Platforms: have really come to the fore over the last 10 years. Funding Circle https://www.fundingcircle.com/uk/ being the biggest Peer to Peer funder in the UK. Business loans are between £10,000 - £500,000 with a quick online application and a quick decision, providing your business has had a healthy set of accounts over the last 3 years Ensure you understand and allow for loan costs, such as loan set up charges, higher interest rates and read the loan terms and conditions too.

Alternative Funders, A good number of these are backed through the UK Government such as the British Business Bank https://www.british-business-bank.co.uk/ 

Locally in Cumbria, Lancashire, North-East and Yorkshire we have Enterprise Answers https://www.enterpriseanswers.co.uk/ who lend between £10,000 to £150,000 to regionally based SME’s and are certainly worth a conversation with if your own bank has turned you down.

Government Grants / Regional Business Support Funds. There is a whole plethora of funding, grants and loans available through the government and other organisations;

A good place to start is to search the UK Government Business Finance Support website  https://www.gov.uk/business-finance-supportd.

National Lottery Good Causes Fund https://www.lotterygoodcauses.org.uk/funding

Cumbria Chamber of Commerce, https://cumbriagrowthhub.co.uk/business-support/financing-your-business/consultancy-subsidy

Cumbria Local Enterprise Partnership (CLEP) https://www.thecumbrialep.co.uk/finance/  

Many of these schemes are regional or industry sector specific and if you need funds quickly, they may not be suitable for your requirements. Many grant funds, will not be released at the start of a project or into your business bank account either. Grants may pay phased payments or paid directly to you our suppliers, for the projects, equipment and support they deliver to you.

Investors and Angel Investors

If your business is on a steep growth trajectory, it would be worth considering an injection of cash from a private individual or by bringing in Angel Investors. Angel investors are similar to the Dragons, on Dragons Den. They lend their money for a share of the equity in your business, which might be 25-50% of the shares. This is in contrast to private investors who may be friends, family or business associates, and not want shares in your business, but who will want a return on their investment. Ideally you want to choose an Investor or Angel who could bring added value through their knowledge and experience of your industry or market too.  

Pension Schemes can lend to business too, particularly those set up as a SASS (Small Self-Administered Scheme). Pensions can be a valuable source of business finance in the right circumstances. Shareholders, or business owners, can lend money to their businesses through their own private pension schemes. This is much more specialised route to obtaining finance and it is essential to obtain expert advice if this finance option is being considered.

If your business is at a crossroads and you need to find more cash to fuel your business growth, please do get in touch.

It is important to be able to get impartial information and advice before choosing any financial service that may carry risky long-term commitments. I am more than happy to share my knowledge and experience and work closely with to you find the right business funding solution for your particular business circumstances.