Funding To Start A Business

One of the hardest parts of starting a new business is finding the right finance provider. Commercial success is also built on having the right knowledge and skills and a high level of commitment. But without the appropriate funding solution in place the business idea will remain just that – an idea.

Finance is vital because it will help the pay the bills during the start-up phase, while income is building. It will allow purchase of essential plant and facilities, hiring of staff, and funding for the initial business development activities.

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There are a number of finance options available to new businesses and the more common alternatives are listed below.

  • Grants – These are extremely popular but very hard to find. Incentives may be available to businesses based in a deprived area or to those with a strong technology focus. If a grant is not available some agencies offer loans at preferential interest rates but there is substantial competition for these.
  • Personal Savings – A business owner will often choose to invest some of their own capital in a new venture. However, that money is then unavailable for other personal uses.
  • Informal Borrowing – It is not unusual for family or friends to lend capital, often at preferential rates. While convenient, because such arrangements are often based on trust and verbal agreements they can lead to strained relationships if matters do not go as planned or if the lenders change their minds.
  • External Investors – A business with a robust business plan that requires substantial capital may attract interest from individual or corporate investors. However, because they are sharing the risks they will also require a share of the rewards, which usually includes a stake in ownership.
  • Bank Funding – The leading banks offer incentives to new business in order to win customers. They will also offer overdraft facilities or a variety of loan alternatives. In order to minimise their risk and comply with increasing regulation these advances will often need to be secured against property, commercial or residential.
  • Invoice Finance – There is an extensive network of organisations that advance funds to businesses on the strength of their sales ledger. Factoring or Invoice Discounting allows businesses to bridge the gap between raising invoices and getting paid which brings substantial cashflow benefits.

How We at Touch Financial Can Help

We are the UK’s leading commercial finance broker, which means we have substantial depth and breadth of experience when it comes to matching businesses with the right funding solution.

There is no shortage of choice for new businesses looking for finance. But some not applications will be successful and some choices could prove unnecessarily expensive.

We spend time with our customers to understand their finance needs and then we provide information about the best alternatives available from our broad panel of lenders. We know which types of solution will bring optimum value in different situations.

Our service is free of charge to our customers, because we are paid by the lenders. We are structured in such a way that our advisors can offer entirely impartial advice, giving us and our customers the confidence that we are sourcing what is best for them.

We have helped thousands of UK organisations find the right solution to their funding needs. For more information or a no-obligation quote make contact with us today.

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Every month Touch Financial help businesses improve their cash flow with invoice finance. Request a quote to find out how much extra cash you could raise.

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