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Business financing and funding options have expanded greatly in recent years and you’re no longer restricted to loans from the major banks. The alternative finance market offers funding solutions that you may not have considered before, and that are typically quick to obtain.
Initially, you’ll need to consider your specific business’s needs in terms of funding – why you need the finance, roughly how much is required, and how you’ll repay it. You may need regular support for your cash flow each month, for example, or a cash lump for investment purposes.
A secured loan may be appropriate if your business owns one or more assets of value. By using an asset as collateral, the lender can repossess it if you don’t keep up with the repayments, which makes it a low risk option for them.
Benefits of secured business loans
Unsecured business loans don’t require you to put forward any assets as collateral and can be fast to access, although you may be asked to sign a personal guarantee. Unsecured loans of up to £200,000 are typically available, and these can be used for any business purpose.
Benefits of an unsecured business loan
Invoice finance is a type of alternative funding that might be suitable for your business if it has a strong sales ledger. Factoring is one form of invoice finance that releases around 90% of the value of your unpaid invoices, usually within 48 hours.
Benefits of invoice finance
Hire purchase offers you a way to purchase expensive assets without using up your business capital. A hire purchase agreement involves making fixed monthly repayments over a specified period. It also incorporates a ‘completion payment’ that transfers ownership of the asset to your business at the end of the agreement.
Benefits of hire purchase
Equipment or asset-based refinancing allows you to sell a high-value asset to a lender, and then rent it back from them. You make fixed monthly repayments and take back ownership when the contract is completed.
Benefits of asset-based refinancing
UK Business Finance can help you to find the most appropriate form of funding for your needs. Our services are free-of-charge and we can make the funding application on your behalf. Please get in touch to find out more – we operate a nationwide network of offices.
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
What is cash flow finance and how does it work?
Cash flow is the lifeblood of any thriving business. Having a consistent stream of cash coming into the business enables you to pay your bills and plan for the future.
How to access emergency business funding
In an ideal world, you could foresee the financial problems coming your way and plan accordingly. However, as every business owner knows, that’s rarely how it works. Customers go bust, equipment fails and stock gets damaged, leaving you with an immediate requirement for funding so you can ride out the storm.
What is the Growth Guarantee Scheme (GGS)?
The Growth Guarantee Scheme (GGS) is a government-backed lending scheme open to small businesses in the UK.
How to improve your company’s working capital
A healthy level of working capital allows your company to function effectively on a day-to-day basis, providing short-term liquidity and financial stability. It’s important to understand your current position, however – whether working capital is positive or negative.