How to fund business growth?
At some points in the business lifecycle from starting up to business expansion you’ll require external funding. It’ll give you that vital cash injection you need to stimulate business.
So where do you begin?
- Do your research – before applying for funding carry out detailed research into your market, customers and business and identify a gap.
- Get your finances in order – a grant or loan will only be given if the institution is confident the numbers stack up and you’re not a risk.
What can you offer?
A good idea might win over a dragon in the den but is it good enough for a risk averse bank or business enterprise?
Think about what sets you apart. Do you have unique skills, fill a gap in the market, offer relevant work experience and personal capital to invest or do you own property to offer up as security?
Why are you looking for finance?
If you’re unable to self-fund your business and are looking to maximise funding opportunities you can approach a government institution for a grant or a bank for a loan.
Sit down, plan and be clear how much money you need, what exactly it’ll pay for and when. That way you’re more likely to attract investment.
Next, clearly explain how the cash injection will grow your business and how quickly.
How much cash do you need?
The more accurately you estimate the amount you need to borrow and why – the better the long term health of your business.
Borrow too much and you’ll needlessly pay interest on a loan. Borrow too little and your big plans will fail to get off the ground.
As always it comes down to a clear understanding of the numbers behind your business today to forecast what’s required to grow the business tomorrow.
What type of funding is available for businesses?
On the surface there’s too much choice but drill down and you’ll quickly realize it depends on the type of business you run, region you’re located in and the lifecycle stage of your business.
At the end of blog I’ve listed web sites to help you find funding opportunities that might be relevant to your specific sector, product or service.
How do you find the right funding for your business?
The most suitable finance option for your business depends on many things. First question to ask – do you need a loan or grant?
Advice on Loans
Decide what type of loan. Is it short term to simply tide you over a cash flow blip or long term to grow the business such as a business loan, commercial mortgage or loan to buy or lease equipment?
Shop around and look for the deal that’s best for your business and remember a headline rate may not be the best deal over the long term.
Work out how much you’re monthly payments equate to and the total interest you’ll be expected to pay back over different timescales and varying interest rates.
Advice for Grants
There are many local authority and government schemes together with charities and foundations aimed at growing specific sectors through grants.
It’s down to you to match the strict objectives and criteria of the scheme.
Often you’ll be ask to part fund the venture and the scheme will provide the rest.
If, however, you complete in-depth research, write a robust business plan, your figures stack up and you meet the tough criteria to match the funding you’ll have a strong case to attract funding.
The web is a great place to start looking for funding from local authorities, Government schemes and Europe that are relevant to your product, service or location.
|Why you need funding||Websites|
|Environmental & Sustainable||www.lowcarbonworkspaces.co.ukhttp://www.gov.scot/Topics/Environment/funding-and-grants|
|Training (apprentices & graduates)||HMRC www.gov.uk/government/collections/apprenticeship-grant-for-employers-of-16-to-24-year-olds|
How can we help you gain funding?
At Murrison and Wilson we offer a bespoke service that is tailored to every clients business at any stage in the business cycle.
Whether you are starting up, growing the business or getting your house in order for an exit plan we help you and financial institutions that provide loans and funding to understand the numbers behind your business.
We mitigate your risk of borrowing by fully assessing the financial health of your business and develop a realistic business plan that accurately forecasts how much you can afford to borrow and how to use the cash injection wisely to grow a successful business.
If this sounds like the support you need get in touch via Twitter, LinkedIn or call Simon on 0141 290 0262 or email firstname.lastname@example.org