Funding Opportunities

Often used for short term requirements to help finance working capital often at the start-up stage, usually for smaller purchases or stock. Benefits of this type of funding include regular reviews and they can be changed quickly.

These are often mostly used for longer term requirements to help finance larger purchases but are also used for working capital. For example manufacturing equipment or computers. You will need to show the lender that the business will generate the income and cash to make the repayments. Benefits include fixed interest rates and repayments that you can plan into your cash flow.

This type of funding is a direct alternative to a bank loan. Lenders are matched with borrowers through an internet based platform, and allows them to invest in your business for share in the returns. It allows for multiple people to invest in your business and each person can offer a small amount of the loan amount needed which can range from a few thousand to millions.

This covers both invoice finance and asset-based lending.
Invoice finance – Includes factoring and invoice discounting – for both finance is provided against outstanding debts and is available to businesses that sell products or services on credit to other businesses. In both options a financier would purchase the invoices (representing the debt owed to the business) at a discount, and collect the money owed. With factoring the financier would manage the sales ledger, in invoice discounting you would maintain control of this.

Asset based lending is similar to invoice finance, with funding being extended against a wider pool of assets, typically stock, property, plant, machinery as well as potentially intangibles such as intellectual property or forward income streams.

Leasing or hire purchase is used by businesses to obtain assets such as vehicles and office equipment. It is a popular solution as it allows you to get new equipment that you aren’t able to purchase outright and allows you to plan your cash flow with consistent regular repayments. It is a secure form of finance as it cannot be recalled during the life of the agreement providing you keep up with the payment.

Export finance
There are two stands to export finance; it can help to mitigate risks such as default or delayed payment on exported goods and it can help to fill the gap between importing raw materials (overseas suppliers will want to be paid in advance of shipping) to when the finished product is sold. Traditional tools for export finance are: bonds and guarantees, and letters of credit
Trade finance
Used to assist businesses in purchasing goods (international or domestic), and is often provided for a specific shipment or time period. Until the finance is repaid the goods belong to a finance provider. The process is supported by letters of credit, bills of exchange and bank guarantees.

Venture capital finance is in essence the same as an angel, but instead of individuals if would be a firms investing in your business. They also want proven track records, and so rarely invest at the start-up stage and are unlikely to get involved in the day-to-day running of the business, however they will often help focus the business strategy. Securing VC investment can be a complex, costly and time-consuming process. A detailed business plan is a must. And legal fees will be incurred through the deal negotiation, regardless of whether investment is ultimately secured.

This type of funding can come under both repayable and non-repayable finance and has become increasingly popular in recent years. Usually accessed via online platforms, it involves the collective efforts of often large numbers of people networking and pooling resources to support projects, ventures or initiatives of others. A profile or website is set up explaining the offering and the amount you want to raise and is promoted using networks such as social media, friends, family and colleagues.
There are four different types of crowdfunding:

• Reward-based: You would pre-sell a product or a service to launch a business concept without incurring any debt or sacrificing any shares or equity. Projects that are launched for contributions would compensate their investors with some like a t-shirt, experience, or product of what they are creating as a thank you.
• Equity-based: where the monetary exchange is for company equity or ownership, not goods and services.
• Credit-based: also known as ‘peer-to-peer lending’ and is used on more of a personal level. It is essentially a loan at a reasonable rate funded by multiple investors.
• Debt-based: the lending of money to an individual from an investor in exchange for interest.