As businesses in the United Kingdom and the world at large begin to open up, now is the time to do some recovery and reconstruction thinking and look at  business improvement strategies. You need to think about:

• Where your business is headed?
• Where you want it to be? and
• The pathway from A to B?

Once the above has been decided, it’s time to think about how to fund and achieve the direction. This could involve a further  business investment.  You may need help in various areas and raising finance may be one of them.  You may need it for; cash flow, paying staff, buying stock, buying equipment, re-designing your business model, paying  for operating expenses or even to pay for an exit strategy and much more. There are different ways of getting different business funding, however I am focusing on business loans at this point. Here are 5 tips to achieve this:

1. Hire a Business Consultant.
If you are unsure of where to start, I would recommend your starting point as consulting a Business Advisor or Mentor or finance Consultant. There is also your bank manager, googling it (not a joke actually) or speaking to another business who has successfully raised a business loan.  One of the specialities of a Business and Finance Consultant is to advise on how to access finance. This could include, raising finance for a new business, such as various start up loans or a business loan to grow your existing business to fund new products or services. A Business Advisor could also advise you on if you want to expand or divert your business too, with the intention of getting more customers. They can also help you carry out a Business Valuation, Performance and Health Check Service to improve business performance by making your business sustainable, compete effectively, improve profitability, structure your decision-making process and achieve business goals to ensure it is on the right track. It is always advisable to get an expert, such as a Business Advisor’s opinion on the best business loans to go for. That way, you are guided on whether getting the business loan is in your interest, at the right time, which one and how much to apply for.

2. Due Diligence. Usually, a lot of businesses fail at the first hurdle on their way to getting a business loan. To access finance, you will need or be in a position to get the following: Previous years' Management Accounts (regardless of if you are a sole trader or limited company), up-to-date management accounts coupled with at least 3 months business bank statements. In some cases, a business plan with a 2-year cash flow forecast. In addition to this, you may be required to provide the last set of 4 quarters of VAT submissions, and your latest debtor’s book. Now not all of this may be required by the same funder at the same time, however get them ready, be prepared or have ready access to them if you are looking for some serious funds. 

3. Don’t ask for a 100%. If you are looking to build a business with no skin in the game in terms of financing it and you are looking for an unsecured loan, then if wishes were horses, beggars would ride. No funder want to fund 100% of your growth or new business.  They need to see you have invested something in cash or in kind, something tangible. There are various ways to show your investment in the business and I’m not talking about your time spent working in the business, but actual quantifiable ways.  

4. Seek available funding. If your business has been affected negatively by the COVID-19 pandemic, I would advise you first opt for the UK government’s Recovery Loan Scheme. The government is providing it to help businesses of any size to access loans and other kinds of finance to enable them to recover after the pandemic and transition period. Up to £10 million is available per business, and the actual amount offered and the terms are at the discretion of participating lenders. These are a network of accredited lenders, listed on the British Business Bank’s website. The government guarantees 80% of the finance to the lender. However, as the borrower, you are 100% liable for the debt. The scheme is open until 31 December 2021, subject to review. You can also be rest assured that the terms and repayment rate will be one of the lowest you will be able to get in these times.

5. Alternative lenders. Another option of how to access a business loan, is through a number of alternative funders, such as funding circle and the like. They offer loans to businesses that have at least a 2-year history.  There are also other alternative lenders out there that have great options and levels of flexibility for repayment, such as VA Money, etc. As a Finance Broker, we are able to help you access these hidden sources of funds, who you may only e able to approach through a broker like ours.  
 
If you are unable to get a business loan, how about considering outside investors? Perhaps you are willing to sell shares to Business Angels or venture capitalists or consider crowd funding.  We work closely with Crowd cube as one of the organisations to help our clients raise funds? Having investors can also bring in additional business expertise, and this can be in the form of contacts, networks you may not have access to, mentoring, etc

This isn’t exhaustive and therefore it takes us back to my first point on using a Business Advisor to advise on the best possible way on how to get access to finance. That is what they are there for and will do all the leg work for you, besides knowing your best options and leaving you to spend your valued time running your business especially if you are low on staff or a micro business.

If any of the points stated above resonate with you or you would just like some advice on which direction your business is heading, get in touch with us today. Please feel free to call and speak to an RBSS Business Advisor on 0333 355 1696 or drop us an email on the link below. We provide real business solutions for start-ups and existing micro and small businesses.
 

​After 3 months of COVID-19 and during this response phase to the attack, how have some of the finance packages the government put in place been responded to by businesses in the UK.  Apart from the premises business rate related grants and the job retention scheme, some of the other popular funding support schemes that businesses have responded positively to are:

1. Coronavirus Business Interruption Loan Scheme - CBILS
2. Bounce Back Loan - BBL
3. Self-Employment Income Support – SEIS
4. Future Fund and Innovation financial support  - £1.25b

 
Has this been a load of hype or have they been accessible real solutions. How have they done so far?