FUNDING & GROWTH

FUNDING & GROWTH

A solid financial base is essential when you are starting up a new business. The right financing package will carry you through any temporary difficulties yet still allow you to make the most of the growth opportunities when they arise.

You should know the following;

  • Deciding how much money you need.
  • Investment finances and requirement
  • Different forms of borrowing
  • Other sources of help

HOW MUCH DO YOU NEED – PLANNING

  • Draw up a budget based on your business plan.
  • Identify how much financing you require and when you will need it.
  • Allow for contingency funding. How much extra finance you might require in near future?

INVESTMENT FINANCE

It will be difficult to borrow money from a bank unless you can point to an adequate financial base of money invested in the business.

  • Usually with your own capital in the business things go more serious
  • You may be relying on family and friends who are willing to invest in your business
  • Your business may attract outside investors.An outside investor whose personal investment in a business qualifies under the Enterprise Investment Scheme enjoys special tax treatment

BANKING FINANCE

After your own family, the most likely source of borrowing is the bank.

  • Many businesses need overdraft finance from time to time.
  • Overdrafts are useful for financing temporary – or fluctuating – cash shortages.
  • Loan finance is often the best way to finance a longer-term business need.
  • Bank-finance costs can vary widely.

OTHER FINANCE

There are other more specific finance options also available;

  • Leasing is used to finance equipment you do not need to own.
  • Hire purchase (HP) is used to finance the purchase of equipment.
  • Factoring provides you with finance against invoices that customers have not yet paid.
  • Stock finance, where cash is raised against the value of stock held by a manufacturing company, may also be a possibility

Comparing the cost of different forms of finance is complicated.Key factors are fees, the period of the finance, interest rates and the tax position.

If you have difficulty in borrowing from the mainstream banks, you may be able to obtain financing from Alternative Markets. These are very popular these days and a good proposition will bring handsome cash investment.

SECURITY FOR BORROWINGS

For any borrowing, you need to show that you can afford the capital and interest payments. In addition, a bank usually wants security to ensure the loan is repaid if things go wrong. There are a number of different possibilities:

  • A personal guarantee is a guarantee from the director/owner
  • A guarantee from a third party, who will be liable to pay the debt if you default.
  • If your annual turnover is no more than £41 million, another source of security may be the Enterprise Finance Guarantee (government backed).
  • You may need to take out insurance that will pay out if you suffer an accident, sickness or death.

WORKING WITH YOUR BANK

  • Before lending you any money the bank will want to see a viable business plan.
  • Once your business is operational, provide the bank with regular management information summarising sales, margins and costs.
  • Warn the bank if you expect to run into any financial difficulties.
  • The Better Business Finance website offers help with the information you need to support a loan application, improving your credit rating and the bank appeals process. Find out more at www.betterbusinessfinance.co.uk.

GOVERNMENT AND OTHER HELP

There is a wide range of schemes providing help and finance for start-up and small businesses.


Check what is available before you start trading,or you may no longer be eligible

  • Value your business assets – Banks will value your assets conservatively when you use them as security for borrowing.
  • Banks will usually lend only 50% – 60% of the value of a business property (Short leaseholds offer little security).
  • Equipment will only be valued at its resale price – usually its price at auction.
  • Banks may lend up to 60% of the value of your trade debtors.

THE MATCHING PRINCIPLE

It is usual to match the type of finance to the purpose it is used for.

  • For development, and to finance start-up losses, use investment finance.
  • For equipment and vehicles, use fixed-term loans, leasing or hire purchase.
  • For working capital, use an overdraft or factoring. Working capital is the cash you need to cover the delay between paying suppliers and receiving payments from customers.
  • For property, use a long-term mortgage

HOW DOES IT WORK (WHAT’S INCLUDED)

We can be of assistance by providing the following services to ensure that you hit the right type of finance at the right time for your business;

  • Helping you draw up a budget and plan
  • Detailed cashflow projections
  • Advice on investment, banking, and other finance
  • Advice on long-term and short-term finance
  • Assistance in working with your bank

BENEFITS OF USING US

  • Guaranteed confidential and honest assistance
  • Quality advice and service
  • Improved cash management
  • Long-term support for business growth
  • Proven strategies

WHAT NEXT

We have made it so simple

Initial Meeting (Call us, Meet us, E-mail us)

With our initial discussion, we assess your requirements and have a good idea of your opinions.

 

Available Options

Once you are happy with the options and decided what best for you, for example, our cloud accounting packages, business growth package, management reporting, complex tax services. We agree on the frequency of reporting and deliverables. And then get the system set-up and ready for you.

 

On Hand Support

That’s all about it and you are now up and running. This starts the era of our growth reasearch along with ongoing support.

Timeframe

The whole process should not take longer than a week, in some cases, we are happy to commence work from the very next day!

Switching to us:

We can understand the pain of switching a supplier, however, it is not at all like the switching a broadband supplier. In case have an existing accountant, our support process, will make it seamless. You offer a big thank to your previous accountants and we collect all the information on your behalf.

 

Get in touch

If you would like to know more about services and would like to get an instant quote please contact us 

 

We also offer non-executive and FD services to your new  businesses, that is demonstrative and more than what you get from a traditional accountant.

 

If you are setting up a new business or if you have already set-up a business and seeking to appoint an expert team of accountants who can provide attention to your new business and would like to get an instant quote please contact us 020 7636 3455 with no delay.

 

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