Whether it’s buying new equipment, purchasing stock, expanding product lines or maintaining positive cash flow, there’s a multitude of valid reasons why you may need to access business funding.
Businesses, however, are often reluctant to approach lenders. According to the Federation of Small Businesses (FSB), only 13% of small businesses are currently applying for external finance.
Why is that?
There are many reasons. You might be scared about being lumbered with debt and interest repayments. You might be fearful about rejection, thinking your business accounts and credit score will hold you back. You might not be aware of the breadth of alternative finance options out there if a bank loan or overdraft facility is not available.
The last point is a particularly interesting one. Mike Cherry, Chairman of the FSB, has identified small business access to finance as a key concern as the UK moves towards Brexit. He points to alternative finance being an option more businesses need to explore:
“Despite being a decade on from the financial crash we still have this dangerous combination of weak appetite for, and low awareness of, alternative finance options, high borrowing costs and inadequate support for small firms that are turned down by banks. Too many small business owners approach the big lender they’ve always dealt with as a first port of call when asset, peer-to-peer or equity finance could be a much better match for them.”
How Informi can help you find business funding
Informi has recently teamed up with Alternative Business Funding to develop Funder Finder, a tool that connects small businesses to alternative finance solutions based on their requirements. By filling out a simple 5-minute form you can quickly see the options available to you which are displayed in order of suitability.
It’s a great tool and well worth checking out. But don’t just take our word for it, here are some of the businesses who’ve used Funder Finder to access finance solutions.
County Down Developments
A construction firm based in Northern Ireland, County Down Developments were offered a loan facility of £250,000 which they’ve used to buy land, pay architects and cover construction project costs.
“Although both my Co-Founder and I have almost 60 years of combined experience in the construction industry, the company itself was new, so unfortunately, we didn’t meet Barclay’s strict funding criteria of having a minimum of six projects or four-to-five years’ construction experience under our belts.
“We were expecting crazy interest rates in the region of 35%, but we were wrong. The Funder Finder tool, with its ‘traffic light’ system, was easy to use and Blend Network came up as a potential funder at a sensible rate
“The structure of the loan means we can pay our architect, contractors and suppliers on time. We can even leave money on deposit every month, which allows us to negotiate supplier discounts too.”
Michael Carnduff, Co-Founder, County Down Developments
An award-winning chocolatier, Cocoa Amore needed funding to help with their cash flow when producing a large order of Easter Eggs.
“My business is seasonal, with 40% of the year’s turnover generated in December alone. For the past few years, I have been producing solid chocolate Easter eggs for another company. This year, the order doubled to 500 eggs.
“The eggs are expensive to produce, so I needed cash flow finance to help while creating the products. I’ve taken out business loans in the past, but I didn’t want to be tied down by more monthly payments. I enquired through the Funder Finder tool, to find out what kind of funding options were available. There are lots of alternative options to choose from out there, but I found cash flow finance from Quick Capital was the perfect fit for me. Repayments based on my daily turnover means that I’m never out of pocket. It’s an affordable and manageable way to access finance for whatever your business needs.
“A few months later, I received a bill that I needed to pay quickly. I rang my advisor, and received additional funds within two days! It really is that simple!
“Small businesses need financial help sometimes, so it’s great to know that I can access cash flow finance quickly!”
Peter Gardner, Founder, Cocoa Amore
A provider of equipment for jigsaw puzzle enthusiasts, Jigthings needed funding to help them buy stock and keep up with seasonal demand.
“The global jigsaw market in total is worth £100 million. In the UK alone the education market is worth £100 billion. We only need to capture a tiny, tiny portion of the market to have a good business.
“Sales in November, December and January match the remaining nine months of the year which creates a cash flow peak.
“We have to have everything in America by the last day of October. Half of our total sales for the year have to be bought and paid for by October 30. We need to make sure we have the cash available.
“We secured £80,000 in initial funding through pension-led funding. The Funder Finder tool was instrumental in helping our two businesses grow very quickly. It is able to source many different types of finance to suit individual circumstances.”
Colin King, Co-Director, Jigthings