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Business Finance tips

Money for your business: 6 Business Finance options?

Business finance can be a confusing.

Let's face it, the fear of making the wrong decision when it comes to your company's finances is the main reason people head straight to their bank for advice and guidance.
Things are beginning to change though.
Where banks and finance advisors once held a monopoly on business finance knowledge, the internet has grown to offer you most, if not all, of the support and guidance you need to empower you to take control of your own finances.
No longer do you need to remain at the mercy of your banks and, more often than not, end up with their product, whether it is right for you or not. Use this guide as a starting point for learning about the business finance options available to you and your business.

1. Factoring
Factoring is an efficient way of getting paid more quickly by essentially 'selling' your invoices to a specialist company.
Benefits:
Provide near-instant invoice payments
Frees up your time (no longer chasing customers for payment)
Many factoring companies offer a trial so you can see if it is right for you before you commit.
It is an up and coming form of business finance, usually adopted by many businesses early on in the piece to avert future, often fatal cash flow crisis.
Learn more about factoring
See if you can organise a factoring trial for your company

2. Commercial mortgage
Best suited for financing the purchase of land/buildings for your business - they are ideal for a firm with property at the heart of its business.
Benefits:
Offers tax benefits
You will no longer be at the mercy of a landlord
Tailored to suit your repayment expectations and budget
Limits capital expenditure, freeing up cash for business ventures
Learn more about commercial mortgages
Compare commercial mortgage quotes

3. Venture Capital
You have probably seen the Dragons Den by now and have an idea about what this is. If you are comfortable with swapping equity and control in your business for cash, venture capital may be an appropriate financing option for you.
Most venture capitalists shy away from providing 'start-up cash' and look to buy into a business when it requires second stage funding to take the business to the next level.
Benefits:
Some venture capitalists may help steer your business in the right direction

4. Asset finance
Asset Finance allows your business access to vital assets without paying for them all at once. All forms of leasing are basically rental agreements giving you the right to use an asset owned by the finance company for a specific period of time in return for regular payments.
Benefits:
Allows you to sell your assets to a leasing firm while retaining access to them
Allows you to rent new or used assets directly
Saves start-up capital costs, improving cash flow
Offers tax advantages, free from risk.
Learn more about Asset Finance
Compare asset finance quotes

5. Business Loan:
Approaching a bank for business loan is a common route to funding a company start-up. Any lender will want to review a detailed business plan before imparting any funds and will expect collateral, in the form of either the firm's assets or a property. Securing a loan against the latter is risky.
Benefits:
People tend to feel more comfortable with a loan because they have a greater understanding of them.
Learn more about Business Loans
Compare Business Loan quotes

6. Personal savings
For those fortunate few that have enough cash tucked away for a rainy day (or that special idea), personal savings can be one of the cheapest and easiest ways to inject funds into your business. It will only cost you the interest that will be missed on your savings (and possibly that trip to Australia you had been wanting to go on next year).
Benefits:
Cheap
Easy (presuming you remember your PIN code)

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