August 3, 2016

Raising Finance for Your Business

Are you struggling in raising business finance? A Glasgow accountant from The Kelvin Partnership will be able to make sure you have all the business support you need!

Raising finance for your business can be the biggest hurdles in getting your business up and running. Finance is an essential element required in setting up a business, but you can raise finance in a number of different ways. The Kelvin Partnership has close relationships with a number of financial sources, so we have outlined some of the options for raising finance for your small business.

pound coins raising business finance

Bank Loans and Overdraft

When raising business finance, you have to choose the right overdraft and loan. You need to consider how long you intend on borrowing the money for. An overdraft is a more short-term solution, allowing you to borrow money through your banks current account, up to a certain limit. A loan, however, is a more long-term lump sum of money. It is important to consider an unsecured loan; this means that the loan is not held against a particular asset or your home etc. With an unsecured loan you will know exactly how much you are paying back each month and for how long.

Hire Purchase or Leasing

Hire purchase or leasing is a type of asset finance. Allowing business to control and possess assets for a certain period of time. Hire purchase or leasing involves paying for the asset in instalments or paying rent which covers the depreciation of the asset as well as the interest to cover the capital cost. Hire purchase or leasing allows companies to acquire certain assets without requiring to pay a lump sum (which may be unaffordable at the time).

Sales Invoice Factoring and Discounting

Sales invoice factoring and discounting are financial services which enable businesses to release any funds tied up in unpaid invoices. A third party gets involved, advancing money from up to 90% of the outstanding value on invoices within 24 hours. However, there are key differences between factoring and invoicing to consider.

Factoring involves the third party taking control of the sales ledger and chasing up customers for the payment of invoices. They are also responsible for processing the payment of invoices, this means that your customers are fully aware that a third party is being contracted to a factoring company.

When invoice discounting, your customers are not likely to be aware of your relationship with a financing company. In this arrangement, you remain responsible for the sales ledger, payment chasing and invoice processing.

Venture Capital

Venture capital is type of private equity. This form of financing comes from larger firms or funds to help fund emerging firms and small businesses. Typically, this type of finance is given to firms with a high growth potential. A small business accountant can help you to secure this funding to aid the growth of your business.

How we help you in Raising Business Finance?

As a small, growing business it is essential to secure funding to aid the growth and development of your company. A small business accountant can help your business with everything from developing a business plan to securing finance for your new business. The Kelvin Partnership can help identify the best form of finance for your business!

If you have a start up business and need some advice about other aspects check out this blog post! Also, you are interested in raising finance for your business, or require any of our small business accountant services, then get in touch.