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Alternative Sources of Finance
Finding funding sources for your fledgling or growing business is crucial. While each option offers advantages and disadvantages, it is always a wise idea to approach every option as a business professional. The key to finding any funding is to have a well-written business plan and proposal which will prove that you are serious about your business. To help you further you may want to read through the Business brochures below:
Business banking – working for you (PDF)
Helping business source finance (PDF)
Managing your business through challenging times (PDF)
There are a number of ways to access finance for your business:
Friends and family – Your family and friends have a vested interest in you, simply speaking; they will want to see you succeed. Another good reason to approach family is that when you receive money from these individuals there usually isn’t any interest. Approaching family or friends can be difficult but it can and does work if you stick to a few simple rules. It’s best to be prepared and business like – show them your plans and forecasts and draw up an agreement with them for repayment terms and ensure you stick to it. These terms can be written via a lawyer and will put your agreement on a very professional footing.
Equity Financing – Many thousands of companies are financed each year by “business angels” - private or business investors in exchange for an equity ownership stake. One downside is that you may have to give up a percentage of ownership of your company to accommodate the business investors’ demands. In addition, angel investors and venture capitalists may also require a board seat and/ or regular involvement in company operations to ensure the protection of their investment.
Related websites:
http://www.ukbusinessangelsassociation.org.uk
Trade credit - Trade creditors who will lend money on the condition that the borrower purchases bulk goods from them. But keep in mind that trade creditors rely heavily on the business credit score before lending any amount of money. A credit history is extremely important in determining one’s financial reliability of paying off owed debt. If a person’s credit history is poor, they will more than likely be denied by trade creditors.
Government sources - You can also use various governmental bodies as business funding sources. There are a range of funding options available from Government-supported schemes. Invest NI is the main government agency responsible for the development and promotion of the business sector in Northern Ireland . Services provided by the agency include financial support and funding to enable businesses to compete and grow, so that they can contribute to regional and national prosperity.
More information can be found on Invest NI’s website
Funding can also be obtained by European Investment Bank. Loans are aimed at small to medium sized companies.
For further details more information can be found on:
Further information - If you are having trouble finding the appropriate business funding sources for you, there are many guides and directories that you can take advantage of. One site to help you find business funding sources is found at http://www.j4bgrants.co.uk.
GrantsNet is another one of the business funding sources that are available to businesses and charities. Through these different business funding sources, you should be able to fund something to help you, whether it is for starting up a business, expanding one, or buying one.
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