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Tips & Tricks for Start-Up Finance

Congratulations. You’ve made the decision to set up your own business.  It might be a daunting task, but it's a rewarding and profitable one too! 

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Whilst it can be a daunting challenge, it’s also one that’s hugely rewarding. And with the right funding behind you, it can also be profitable.

Therefore, planning, preparation and proposition are vital. It’s highly likely you’ve thought of everything, but spare just a moment to read the following – it could save you dearly on your finances, because getting your finances right will make, not break, you!

Business Plan Budget

When starting up a new business draw up a budget based on your business plan. Look at what you need to outlay in order to start trading – rent, utilities, wages, product, equipment etc. Bear in mind also that monies will be slow to come in initially, however fast your ‘stock files off the shelves’, as notoriously even reputable clients can be slow payers - yet your overheads will still need to be covered. Maintaining a fluid cashflow is essential.

Top Tip – In order to ensure a constant cashflow, many businesses look at invoice factoring. You aren’t borrowing money with this alternative finance arrangement; you are simply being advanced monies from issued invoices. Your factoring provider will pay up to 90% of all issued invoices, within 24 hours; paying you the balance (minus fees) once your client has paid. Over 40,000 UK businesses use factoring. Here at Capital Corporate Finance we are one of the largest introducers to the market, as such we can arrange this facility for you quicker and at better rates than going direct.

Borrowing Options

Did you know that there are many financing options to choose from, not just traditional loans from high street lenders or overdraft facilities? Equally, funding can be both short and long term, unsecured – whereby you don’t need to secure assets or collateral against your lending – and secured loans.

Top Tip – Different forms of borrowing can often allow you to raise additional capital. Equally, different borrowing can be better for different needs. Take for example, peer to peer (P2P) lending. This type of borrowing ideally matches up SME businesses with tailored lending partners; partners who are looking to support the UK SME market. P2P lending can be tricky to navigate – thankfully, we at Capital Corporate Finance work closely with a large number of P2P lenders, knowledgably finding your business the right lender at the best rates.

Beyond the Bank

Many new businesses will find themselves in a position of being declined funding by their bank. It’s not uncommon, but all is not lost. Just because as bank has turned you down doesn’t mean other lenders will (or that you have to pay over the odds as a result). Specialist brokers can refer you to lenders who have far less rigid criteria’s.

Top TipAlways use an independent broker – this way, they will have access to the whole of the market place. Plus, and most importantly, they will not be tied to a limited amount of lenders; or worse still, incentivised to place your business with unsuitable providers. Here at Capital Corporate, we have been independent for more than 25 years, with relationships with UK and overseas banks. We have access to the whole of the market and do not have incentives to place your business with specific lenders. Our enviable experience and trusted relationships often sees business referred to us by banks when they cannot help. What’s more, when we are arranging your finance – which includes overdrafts, commercial loans, enterprise finance guarantee scheme, cashflow loans and mezzanine finance – they are usually offered without set-up or arrangement fees, and rarely have any early redemption charges.

FACT - Lack of cashflow is the down fall of most new businesses – seeing 20% fail in the first year, and a further 50% failing in their first five years. With our help you can avoid becoming one of these statistics.

Call us today and see how our wide range of flexible and alternative finance can help your new business soar!

For more information on how Capital Corporate Finance can help your business through invoice factoring, peer to peer lending and banking, including overdrafts, cashflow loans, unsecured and secured loans and mezzanine finance, get in touch. Call 07785 596053 or email carole@capitalcorporate.co.uk


 Image courtesy of Stuart Miles at FreeDigitalPhotos.net