A paracetamol for your funding headache?

With the financial climate as it is, these are clearly worrying times in which to be setting up or running any business. However, despite the prevailing pessimism, small business owners are advised that there are still a number of funding opportunities which they should be aware of. Although the traditional forms of financing available to businesses are becomingly increasingly limited or costly at the moment, there are alternative sources of funding which owners can take advantage of in order to obtain the vital investment needed to both start and develop businesses and enterprises.

The Chancellor, Alistair Darling, recently announced in the Pre-Budget Report that £1billion is to be set aside to support bank lending to small and medium businesses. Additionally, a further £50 million is to be made available in a separate scheme to convert business' debt into equity. The Department for Business, Enterprise and Regulatory Reform already operates a 'Small Firms Loan Guarantee' which gives eligible small firms a government guarantee for bank loans in certain circumstances.

For businesses seeking to become greener in their operations, the Carbon Trust has also recently announced the availability of interest-free loans of up to £200,000 to small businesses to help make businesses more energy efficient, which, of course, can significantly reduce firms' energy costs now and for the future.

In addition to governmental efforts, there are a number of independent bodies that can be valuable sources of finance for small businesses. For example, the Black Country Reinvestment Society offers loans to small and medium enterprises and start up businesses in the region with workable business plans but who cannot obtain financing from the usual bank sources perhaps due to a short trading history or a lack of assets to offer as security.

Similarly, business owners should also be aware that alternative forms of finance may also be available from, amongst others, venture capitalists. Such investors are likely to be increasing active in the coming months. Alternatively, firms should be aware of the possible advantages of invoice discounting facilities to improve cash flow and debt control.

If you feel your business is restricted by the funding opportunities available to you, please feel free to contact Damian Beard on 01384 342116 who will be more than happy to discuss potential options and the advantages and disadvantages of the various types of funding that may be available to you.

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