At some point in your business’s lifetime, you may look at raising finance. Whether you are just starting out or you have plans to expand, all businesses need to raise the funds from somewhere. Most commonly business owners will approach the bank for this, but after the recent lending crisis they have become an increasingly difficult source to extract money from.
A key element of the raising finance process is to present your potential financier with a detailed business plan. This will include what you will be spending the money on and what you are going to put up as collateral to secure the loan. This document will be heavily scrutinised in order to measure the risk you pose to the person or business providing you with the finance. This is one of the main areas where professional help and advice can go a long way to increasing your chances of success.
There are many different options available to you when you want to raise finance. Each of them have their own benefits and bring their own levels of risk, for example a normal loan will mean the money you borrow will have to be paid back with interest on top, expressed as a percentage of what you originally borrowed. Different types of loan may mean that you repay the lender in a different way, or it could be structured in a way that is more expensive to you in the long run. Seeking advice on this can help as you can find out the most suitable loan for your situation; it may be an option you had not considered.
The most popular routes to securing finance are as follows:
- Angel Investors
- Venture Capitalists
- Peer-to-Peer lending
- Family and Friends
When borrowing from friends and family it is advised to tread carefully. Where most people fall down is by not entering in a legal contract with their family member or friend and it can lead to broken relationships. Going down this route may require a professional to assess your situation and advise you on whether it is a suitable proposition or not.
There are also many government and local schemes available that may help when it comes to raising finance. In order to back businesses there are grants available to help start-ups find their feet. These will require a detailed application, which will likely by scrutinised by a committee that judges a select number of shortlisted businesses to see who will be awarded the grant. To improve your application for these, seek professional advice to perfect your pitch and give yourself the best chance at success.
At Aston Shaw, our raising finance specialists can work with you to meet your specific goals with regards to raising finance. Some of the areas we can advise and assist you with are as follows:
- Objectively review and assist with your business plan, including your financial projections and proposed funding requirement.
- Advise on the funding capacity of your business and a funding structure.
- Assist with the submission, and presentation of a funding document/business plan to potential financiers.
- Assist with the final negotiations with funders.
- Assist you within your selection of chosen provider.
- Project manage the funding process (including due diligence requirements) to completion.
- Review your operating cash management systems.
- Advise on future finance requirements and refinancing options when appropriate.
To speak to one of our specialists, contact us today and we can arrange a free consultation to discuss your needs.