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With so many alternative financing options now available in the UK, it’s not difficult to find funding solutions geared specifically towards the needs of start-up companies - no longer are traditional business loans the only option.
As a start-up, you can leverage the value of your balance sheet assets and overcome the need to present an extended trading history to support your application, for example. Initially, though, it’s worthwhile reliably narrowing down your options, which is where our team can help.
UK Business Finance are commercial finance brokers. We’ll scour the whole of the market to find you the best deals on a free, no obligation basis. So which types of finance might be appropriate for your start-up company?
Hire purchase is a form of asset finance that allows you to spread the cost of expensive assets, such as vehicles, machinery, and equipment, usually for up to six years. Hire purchase is also a good option if you want to own the asset at the end of the agreement.
You make an initial deposit followed by a schedule of fixed monthly repayments and then make a ‘completion’ payment that transfers ownership to your company. You may also be eligible to claim capital allowances on the asset if you use hire purchase to finance it.
The fact that repayments are fixed is important when financing a start-up company as it aids budgeting and stabilises cash flow. Secured and unsecured start-up loans offer the benefit of fixed repayments and are flexible enough to be used for a range of purposes.
Whether you’re looking to purchase a balance sheet asset affordably or want to grow the business by expanding your workforce, a start-up business loan can be a good choice. It allows you to sustainably build the business either by providing an asset as collateral to access the funding or a personal guarantee.
If you’re a start-up company but can offer some form of trading history that supports your application, invoice finance will provide regular cash injections throughout the month. This type of company financing works by releasing the value within your sales ledger – funds that wouldn’t otherwise be accessible for up to 90 days in some cases.
Factoring your invoices also transfers control of your sales ledger to the financier, releasing valuable time for you to concentrate on growing your sales. Furthermore, invoice finance providers take into consideration the creditworthiness of your customers when sanctioning a loan, rather than basing decisions entirely on your company’s credit rating.
When thinking about funding your start-up, you’ll need to consider:
Please get in touch with our specialists at UK Business Finance to find out more. We’ll establish the most suitable type of finance for your company and find the best deals, free of charge to you.
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
How to best prepare my company for a finance application
When preparing your company for a finance application, it’s key to present the business in its best light whilst also providing realistic projections, your plans for the funding, and how it will help the business grow.
What is leveraged finance?
Leveraged finance is a method of funding a business using a higher-than-normal ratio of debt to equity. It’s commonly used by companies wishing to make a specific investment or acquisition with a view to rapid growth.
Can I get a credit card for my business?
A business credit card offers a flexible line of credit up to a pre-set limit and is a short-term form of commercial funding. Its flexibility is a key benefit as you can repay the outstanding balance in full with no interest added or spread payments over multiple months and pay interest.
What can company finance be used for?
Business finance can be used for a multitude of purposes within a company, from boosting general cash flow to funding development projects and buying stock. Its flexibility and adaptability to an individual business’s needs make it ideal whatever stage of business you’re at.