The lay of the lending land…
The lending landscape is changing at the rate of knots isn’t it? Gone are the days when traditional bank loans are the
only option for small and medium enterprises (SMEs) to fund their business ambitions – especially since the 2008 credit
crunch – and rightly so.
Today’s funding options for businesses range from Business Angels and Crowdfunding, to Business Grants and Regional
The UK as a whole is becoming more and more creative when it comes to finding ways to borrow and lend money,
fuelling the growth of the 5.7 million private sector businesses we now have in our country. *
More funding options – a good or bad thing?
In our experience at Footprints Accountancy, this has advantages and disadvantages for the busy, business owners
we come across every day. On the plus side, it means there are even more ways and means to make sure they get the
right type of finance at every stage of their business journey. But on the flip side, they tell us the world of lending and
borrowing can be a bewildering and time-sapping place.
This sentiment was echoed very recently by Keith Morgan, CEO of British Business Bank. Referring to interviews with 505 directors and owners of small businesses, he said, “The financial landscape can be complex and confusing for smaller businesses trying to finance their growth ambitions…too often smaller businesses want to grow but don’t know where to look…” **
It’s often a scary place where business owners not only fear loan rejection, they’re also daunted by the complexity of it
all. So, too often they surrender, which can be poor for economic growth. To quote the Economic Secretary to the
Treasury, John Glen, “47% of SMEs are permanent non-borrowers.” ***
So, where to begin?
Deciding on how to fund your commercial ambitions, wholly depends on where you are on your business journey. In our experience, this determines the road you need to go down.
Perhaps you’re on the cusp of setting up a new enterprise – and you need funds to pay for things like new kit or
Or maybe you’re in the throes of expansion, needing to acquire commercial premises or invest in more up-to-date
On the other hand, you may need to quickly access funds to take advantage of an unexpected business opportunity
that’s come your way – like some new stock that’s become available?
There are hundreds of scenarios that present themselves every day to entrepreneurs like you – depending on what stage you’re at with your business.
And that will undoubtedly dictate what kind of funding option is right for your business. It also determines things like the lending terms, the rates, the duration, the lender itself, and how much equity you might need to relinquish.
Examples of funding options available
There’s a plethora of options out there, designed to help turn business ideas into reality – and ultimately generate more
income for you and your investors. But it all boils down to what you want the money for.
For example, you might run a restaurant and need to invest in a set of new ovens. However, you don’t have the money
available right now to do that, even though you know it’s going to generate more revenue in the longer term. In this
scenario, Asset Finance options may provide the solution – allowing you to borrow money over a set period of time and
pay it back in regular, affordable chunks. This eliminates any financial surprises along the way.
Another example might be where you find yourself in a time-critical situation. Perhaps you’ve received an unexpected bill that you can’t pay now – but you know you’ll be able to settle it soon? That’s when Bridging Finance comes in – allowing you to “bridge the gap” between an immediate debt and credit becoming available.
But the power’s in the plan
In our experience, there’s nothing more informative for small business owners, than a solid and robust financial plan.
It’s only when you’ve exhausted why you need the funding in the first place; when you need the funding by; what
difference the funding will make to your business; when you’ll be able to afford to pay it back; and what return you’re
envisaging – will the most appropriate option come to the fore.
We offer credible business advice on lending
Having already secured in excess of £1m of funding for our clients this year, at Footprints Accountancy we’ve got extensive experience in helping businesses to fund their business ambitions. And what’s more, our Managing Director Julie, used to be a Bank Manager in a past life, so has an excellent grasp of what lenders tend to be looking for in small businesses.
- Work with you on developing a robust plan that’ll fulfil your business ambitions.
- Talk you through the funding options available.
- Attract the right funding for your business.
- Hold your hand through the entire application process if you want us to, including meeting any potential banks or
- Make sure the chosen funding option benefits your business.
- Stay with you throughout your business journey, to make sure you’re on track to deliver against your business
In a nutshell
So, in summary then, it’s perfectly reasonable for small and medium enterprises to seek funds to ignite their business
ambitions. The good news, is that if a bank has closed its doors on you, don’t be put off, there’s so many other avenues
for you to pursue. The right option wholly depends on where you are on your business journey – for example, starting up or expanding. But the key to unlocking the right type of finance, is a robust and solid financial plan. And of course, at
Footprints Accountancy, we can help you every step of the way.