Tips On Choosing The Right Finance Options
When looking for funding for your business, there are many different consideration that should be made before opting for any given option. So what funding is the right funding for you? This entirely depends on the purpose behind acquiring funding. Listed are some of the ways you can acquire finance for your business, so you can make an informed decision before going forth with your business endeavours.
Bank Overdrafts
If you run a business with a fluctuating income, getting an overdraft from your chosen bank can allow for some major benefits. Providing a fast, flexible cashflow for your business, you can use your overdraft as and when you need it. Most banks allow overdrafts for existing customers with zero interest for the first 12 months. If you are in the growth stage of your business, this can act as a great short term solution to keep lift you into the next phase. You can also acquire loans, rather than an overdraft, directly from the bank, but these come with a lot of terms and conditions.
Government Grants
These are more difficult to acquire and having a certain USP will be required for the government to provide you with a grant. The reason these are difficult is because they are interest free, meaning once you acquire the money to develop your business, it is yours for good! You will need to do a fair amount of research before applying for a grant ensuring you meet all criteria that is necessary for approval.
Crowdfunding
As one of the more modern ways of acquiring acumen, crowdfunding can be extremely beneficial for your business. The idea here is that you give those who donate a certain amount of money some form of incentive once your business has completed this stage. Whether it’s a discount on products, a voucher for redemption or any other product or service-based incentive, using crowdfunding allows you to get hold of cash for your business, with a very small comparable price to pay once you have reached your target.
Direct Lender Loans
Rather than using a bank for an overdraft or a loan, there are many reputable, Financial Conduct Authority approved direct lenders out there that you can trust. Always check these establishments have the stamp of approval, and try and use a direct lender, rather than a broker. This will allow you to receive a business loan, without any third-party interference, meaning you will have once, direct, trusted point of contact. The issues with getting a loan from a bank is that often, if you have bad credit, you will struggle to get the money you need for your business at a reasonable rate. Although direct lenders cannot off no credit check loans by law, they can overlook your current credit history. If you are able to prove that you, your business, or any other parties involved have the current affordability to afford a business loan and its repayments, you should be able to access funding with ease!
