Getting funding for your business can be tricky, even for experienced entrepreneurs or established enterprises. There are various sources of business lending, from bank loans or business grants, to crowdfunding, angel investors and venture capital. Here are five tips to help you get started.
1. Plan ahead
Don’t wait to apply for funds until you desperately need them. An entrepreneur with no money in the bank is more likely to take a loan at a terrible rate because they didn’t plan ahead. Having access to enough capital can be a tricky business in the early days: healthy, fast-growing companies will often need to pay staff or invest in marketing while waiting for customers to pay. The lending process at a traditional bank could involve several weeks of applications, reviews, and underwriting, so start well before you need the cash. If you can show growth plans and know you’ll benefit from access to funds in the future, now is the time.
2. Get help
Partner with a CFO or local accounting professional to help vet your local banks. They’ve worked with many of the lenders and can help you develop a strong package to bring to the bank and make sure you’re finding the best fit for your company.
3. Start local
Make your first stop your current business bank commercial lender. Or shop around at local banks, who are often hungry to lend and have the best rates on the market. Also, your local borough council will offer business support grants, so check online and then get in touch with them.
4. Go national
If you aren’t able to get a loan or grant through your local bank or council, don’t despair. The Government offers start-up loans and other access to finance schemes across the country, so try the business support pages on gov.uk.
5. Try online
If neither a traditional bank loan nor government funding works for you, check out the many reputable business loan matching sites out there, such as Funding Circle, Fleximize, or Iwoca. Try getting quotes from a few sites to see which works best for you.
Navigating the lending process can be intimidating, but don’t let that keep you from locating the cash your business needs. As before, it’s a really good idea to work with a CFO or accounting professional who can assist you with gathering the required documents and creating a solid plan for how to use the funds wisely. When in doubt, get advice and – above all – don’t fall prey to easy money or predatory business lenders.
Plan ahead, and you’ll be on your way to a small business loan at affordable rates for your business.
Feel you’re better informed about getting funding for business? The QuickBooks blog covers a wide range of business-related topics – it’s all part of our mission to help small businesses grow.