Accessing the right finance for your business

In this article written by Mark Storey – Partner at BHP Debt Advisory, 'access to finance' is put under the spotlight.

The world of finance for small and medium sized enterprises (SMEs) continues to expand. Whether general or specialist funders, there’s now more choice than ever and it can be increasingly difficult for a business to navigate the options and determine the most suitable for them.

High street banks continue to play an important role in supporting business funding requirements, particularly where there is already a well-established relationship. They often offer a ‘one stop shop’ – meeting many different requirements such as working capital, asset purchase, business acquisition and mergers. Utilising this relationship through the lifecycles of a business can be very beneficial.

There’s also now a plethora of ‘alternative’ banks, grants, and specialist funders including Enterprise Funds which often have an appetite for offering bespoke facilities to specific types of businesses, industries and purposes.

This might mean offering specific facility types, such as invoice finance, stock finance, secured short term loans, or only entering certain sectors such as property development or technology.

These types of lenders often have less onerous terms compared to traditional banks and operate short credit processes, so they offer quick decisions with funding sometimes available within just 24 hours. While their rates might be slightly higher, some of the more established ‘alternative funders’ are now providing facilities at rates that compete with high street banks.

Responsible Finance providers like BEF play an important role within the sector. This type of lender offers access to useful and affordable finance that delivers positive social and economic impact to SMEs and the communities they serves. Their ‘finance for good’ approach is centred on creating and saving jobs especially in the geographical areas where access to affordable finance is needed the most.

As a business moves through its various stages of progression, an increasingly diverse range of funding facilities begin to present themselves. Initially finance might be required for asset purchase, cashflow, refinance or consolidation of previously secured facilities. However, the most appropriate funding will often change as the business develops and other facility types can become available.

A reputable and experienced advisor, with knowledge of both traditional and alternative finance providers, will offer a solid overview of the wider funding landscape.

It’s imperative that advisors work in partnership with the business to understand the exact funding requirements, both short and long term, to accurately source and present all potential options. For example, it’s quite possible that a combination of grant funding as well as different types of debt funding will be the most appropriate solution. What’s more, the best advisors will have a clear understanding of what a funder is looking for and how to present an application to secure the best deal. 

The most important thing to remember is that ‘one size doesn’t fit all’! We’re here to provide experienced advice and guidance so do give us a call and we can chat about how to take your business forward.

To find out more about BHP and what they do visit : BHP Accountants

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