Has the bank turned you down for a loan? If so, don’t give up hope! Check out these top sources of alternative small business finance:
1. Enterprise Finance Guarantee Scheme
The Enterprise Finance Guarantee is a loan guarantee scheme aimed at facilitating additional bank lending to SMEs with a turnover of up to £25m and with no or insufficient security. By providing lenders with a Government backed guarantee for 75% of the loan value, the scheme is facilitating lending that would otherwise not be available. It is available until 31 March 2011 and businesses may choose to approach one or more of the 44 participating lenders. You can get more information on the BERR website.
2. Friends and family
Friends and family may be more willing to lend you money than the bank. They may also offer easy terms such as an interest-free loan. Just make sure you have a written agreement in place and that all parties are happy with the terms.
3. Credit cards
You get one month’s grace before you have to pay back the money, boosting cash flow, and you get a written record of what you spend. Just make sure you don’t spend more than you can afford.
4. Lease and hire purchase
This a natural route to buying equipment without having to fork out the whole cost at once.
5. Factoring and discounting
You sell goods and instead of waiting for the customer to repay you, you sell the invoice to the factoring and discounting firm. Again, this boosts cashflow.
Find out what you might be entitled to. You may have special circumstances that entitle you to government money, for instance, in some situations those from ethnic minorities or people with a disability are eligible for grants. Search the Business Link Grants and Support Directory to check out which grants you might be entitled to..
7. R&D tax credits
If your business involves research and design, you may be eligible for government support in the form of tax rebates.
8. Business Angels
A small scale equity investor may be willing to take a stake in your firm. You can find a database of business angels on the British Business Angels Association website.
Source: Emilie Corbille is a business writer for www.daltonsbusiness.com, the UK’s leading businesses for sale website.