Fledgling firms starting out need funds to launch and get up and running. Fortunately, small businesses have a wealth of finance options that can help them achieve their aims. Here we look at just some of the possibilities that new enterprises can consider, but the best option for a business always depends on their unique circumstances and needs.
Grants
Understandably, grants for small business that don’t require repayment are attractive options for finance. Supplied by private organisations and the government, grants are often available for specific purposes or certain types of businesses but can supply much needed funds for growing enterprises. However, meeting criteria can make many new firms ineligible and competition for funding is fierce impacting success rates.
Invoice finance
Once firms start trading invoice finance is a useful option. It lets companies use their unpaid invoices to assist in securing funding. A swift-to-access finance solution it can see small businesses access up to 90 per cent of an invoice’s value in their account in 24 hours.
Asset finance
Among the easier ways to secure funding, asset finance lets small businesses rent or buy assets they require to run like vehicles and equipment and spread the cost into manageable monthly payments. Asset finance options include leasing, hire purchase (HP) and provides firms with way to access assets without needing to make a large upfront payment that could affect cashflow.
Business lending
Peer-to-peer lending can connect small enterprises with individual investors and provides an alternative to approaching traditional institutions like banks.
Merchant cash advance
A merchant cash advance is a short-term finance product for small businesses that take debit and credit and card payments. Firms get a lump sum of cash and then repay it based on a fixed percentage (usually 10 per cent) of their future card transaction sales plus interest.
Business loans
Perhaps the most popular option for small businesses looking to borrow, business loans are used for various purposes including expansion plans, working capital and purchasing equipment.
Crowdfunding
Often a slower way to secure finance, crowdfunding lets companies raise the capital they need by selling shares to investors, usually via an online platform.
Business credit cards
A quick and convenient option to build credit and manage expenses business credit cards can be a flexible option but require responsible management to prevent paying high interest charges.
To access a wide range of small business financial products, connect with AJL Finance today.
