It isn’t just the banks that are being more careful about financing small businesses.
The 2016/2017 report on Small Business Finance Markets, published by the government-owned British Business Bank, showed that applications have dropped because current economic uncertainties have made small businesses more wary rather than there being an unwillingness to lend.
But there are other ways of finding the extra cash for your business if you’re looking to expand or just to keep going through these uncertain times.
Business Cash Advance
Amounts of up to £100,000 can be secured by this method of borrowing. Cash advance companies such as Credit for Merchance and Worldpay will purchase a percentage of your credit or debit card transactions and place the cash into your account. You pay it back when your customers settle their invoices.
Asset Finance
If your business has valuable assets, such as property or machines, an asset-based loan can be an alternative to consider. Working the same way as a mortgage, the money is loaned against the value of your assets, which, as with mortgages, can be repossessed if you fail to meet your repayments. Alternatively, sale and leaseback is another way of releasing cash in your assets. There are plenty of local firms that will arrange this type of finance, so if you’re looking for a commercial finance broker in Gloucestershire, for example, firms like http://www.choicecommercialfinance.co.uk/ will be able to help.
Crowdfunding
Taking advantage of the global nature of the internet, crowdfunding is one of the most exciting ways of financing a project or an idea. By offering incentives, businesses can bring large numbers of people together to pool their contributions.
Community schemes
Businesses that have difficulty getting credit can often benefit from community development finance initiatives, also known as CDFIs. Focusing on helping businesses that are very small, are in a disadvantaged area or are community based enterprises, CDFIs can offer a variety of methods of financial help.
Family Loans
Another alternative is a family loan. Those who are close to you and know you well could be more likely to trust you than a bank or other financial organisation. However, there can be drawbacks to involving family with financial matters, so it’s a good idea to weigh up the advantages and disadvantages first.