Grant Peggie, Director at British Business Bank shares his tips on how small and medium businesses can gain access to the various finance options available including the Northern Powerhouse Investment Fund.
For any business aiming to grow and develop, appropriate funding is essential. While most businesses are often started on credit or with help from friends and family, once a business is up and running it will need to be financed appropriately to help them prosper and grow.
In recent years, we’ve seen rapid developments in the different types of funding available to businesses, including peer-to-peer lending, crowd funding and business angel finance. While this has created more finance options, small businesses don’t always have the time to navigate around all the types of finance available.
It is for this reason that British Business Bank in partnership with the ICAEW and other business and finance organisations combined forces to produce the Business Finance Guide. The guide, which is now available online sets out the range of finance options available to businesses and provides links on how best to access the different types of finance.
Here are some useful tips to consider when looking for the right funding for your business:
1. Planning is key
Preparing a business plan is important in securing funding as it helps potential lenders or investors understand the vision and goals of the business. To create a business plan, make a fresh assessment of where the business is now, what the opportunities are, how achievable they are and what new challenges there are to the business. It is also important that you assess the future and analyse how much capital needs to be put into the business to finance your latest plans.
2. Know your options
Knowing what options are available is key to making successful progress, especially when looking for funding. Growing a business from the initial idea to a successful enterprise is not a smooth linear journey as new challenges can often appear. Being aware of alternative choices is critical. Remember, while there are various funding options available, availability will depend on the circumstances of your business.
Whether you’re starting out or experiencing a high-growth phase, equity can be an important resource to provide finance as well as broader expertise. There is a breadth of equity funding options available, including the Northern Powerhouse Investment Fund, which can provide equity funding ranging from £50,000 to £2m.
At any stage of its development your business is likely to need a mix of different forms of debt, all of which have their advantages for business growth. The Northern Powerhouse Investment Fund offers Microfinance ranging from £25,000 to £100,000 and Debt Finance covering larger business loans £100,000 to £750,000.
3. Secure good quality advice
Lastly, gaining good independent advice is invaluable. Specialist advisors will be able to provide you with knowledge and information to make the right finance choices. Advice can be gained through a number of ways, from accountants, lawyers, Growth Hubs and other sources.
The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.