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Train to Succeed Blog

14/03/2013 09:51:00

Top Tips for Accessing Finance

Top Tips for Accessing Finance, with Roger Lawton

The first step is to accurately calculate how much is needed.

Q1A. Is external funding necessary? Is the business as efficient as possible, internally?

Q1B.  Can the business use its own assets to fund the project/purchase/need?

Finance is required, normally, for one of two reasons; firstly for working capital and secondly for the purchase of something specific – equipment, vehicle, premises etc. The funding sought must be appropriate to the need.
 
Q2.  Are there sources of external funding other than bank loans and overdrafts?

Yes, there are many, both local and national.
 
Q3. Are banks lending at present?

Yes, to “suitable” businesses, but they are more cautious than they were two years ago and frequently charge a higher interest rate
 
Q4. What is “suitable”?
 
A profitable business with a realistic cash flow which evidences the business’s ability to repay the loan/facility
 

Q5. Do banks lend to start-up businesses?

Yes, but perhaps they are even more cautious, as the risk is higher.
 
Q6. How can I ensure that I have the best chance of having my application approved?

By giving the potential funder all the information required in a professional way.